Hybrid agent are only supported on On Demand License Management and On Demand Recovery does not require a hybrid agent.
To be able to enable integration with On Demand Recovery you may download the credentials.txt file from On Demand Recovery > Recover > Hybrid connection and click on "Download hybrid credentials".
Then, go to your RMAD on-prem console > Hybrid Recovery, then click on "Enable integration with On Demand Recovery". Click the grey button with 3 dots and upload the Credentials.txt file to enable integration in the RMAD on-prem console.
You may leave Azure AD Connect Settings blank if Azure AD Connect is installed in the same server in which your on-prem RMAD console is installed. If not, then specify the server host where Azure AD Connect is installed and provide the credentials.
Specify credentials to access the backups and the primary DC specified for hybrid restore operations and click Save settings. You should see the message "Configuration saved successfully" confirming this section has been configured properly.
The reason credentials are required is because Azure AD Connect synchronization occurs automatically after the restore operation. But On Demand Recovery forces synchronization cycles and requires credentials for the machine where Azure AD connect is installed. After a hybrid restore operation, On Demand Recovery forces Azure AD Connect synchronization to push on-premises changes to the cloud and wait until it completes the synchronization. Restore events can be used to track steps of Azure AD connect synchronization, such as export and import.
Finally, go back to On Demand Recovery > Recover > Hybrid connection. Refresh this page and now the status should be green:
Sometimes you might need to refresh the browser a few times until the status changes.