This problem was due to the Data Residency region the bot was deployed in. The bot was deployed in the "West Europe" region. I had this set to "West Europe", I suspect a similar issue exists for the other non global region "Central India".
This limitation is alluded to but not specifically called out in the data residency tool-tip:
Once deployed the data residency cannot be changed, in the end I had to delete and re-create the bot and select "Global" data residency. The Outlook and Microsoft 365 channels then made available to the bot.
Only the Microsoft 365 channel is needed to get compose extensions working in outlook.