On-demand app generation is controlled by the On-Demand App Service. Tenant admins can enable the On-Demand App Service in the management console, on the Settings tab. The service is disabled by default and must be enabled before selection and template apps can be linked and on-demand apps generated.
When the service is switched from enabled to disabled, any pending requests to generate on-demand apps are allowed to finish. But once the service has been disabled, no new requests to generate apps will be accepted nor will developers be able to create or edit new On-demand app navigation links. These capabilities are restored once the service is re-enabled.