Step 1: Activate SharePoint Server Enterprise Features:
The “View Only” permission level is part of SharePoint Enterprise features. So, if it’s not active already, activate it first both at site collection features and site features.

Login to the SharePoint Online Site collection >> Click on Settings >> Site Settings
Click on the “Site Collection Features” link under “Site Collection Administration”
Search and find “SharePoint Server Enterprise Site Collection features” and click on the “Activate” button next to it.
Go to the Site Settings page again >> Click on the “Manage site features” link under “Site Actions”
Click on the “Activate” button next to “SharePoint Server Enterprise Site features”, if it’s not activated already

#Read more: https://www.sharepointdiary.com/2020/10/sharepoint-online-allow-edit-permissions-but-not-download.html#

Step 2: Create a new permission level from “View Only”
The next step is to create a new permission level from the “View Only” permission level and include “Add” and “Edit” permissions.

Click on Settings >> Site Settings >> Click on “Site Permissions” under “Users and Permissions”.
Click on “Permission Levels” >> Click on “View Only”.
Click on the “Copy Permission Level” button at the bottom.
Give a name to your new permission level, eg: “Create-View-NoDownload”.
Enable the “Add Items” check box under “List Permissions”

#Read more: https://www.sharepointdiary.com/2020/10/sharepoint-online-allow-edit-permissions-but-not-download.html#ixzz7ly73mrZU