OK, you are using S3 protocol. You never mentioned that.
WinSCP does not support setting S3 ACL during upload.
It supports only changing permissions of existing (already uploaded) files explicitly:
https://winscp.net/eng/docs/ui_permissions#s3_acl

Thank you so much for helping me. I saw you've been replying to forum posts since before 2006! I turned on server logging, performed the issue I'm having, and attached it.

Enable session logging in preferences:
https://winscp.net/eng/docs/ui_pref_logging

Like I said earlier, I'm new and need help. How do I get the session logs? I attached a picture the issue.

Please post few screenshots for the "All configured transfer settings cannot be used in current con..." and a session log file of the "it doesn't work as intended".

When I check "Set permissions" and select that option under the transfer settings dropdown, I see the following message and it doesn't work as intended:
"All configured transfer settings cannot be used in current con..." (I can't see the rest)
Might it have something to do with R ACL and W ACL being checked for "Owner"??

See Set permissions option in transfer settings:
https://winscp.net/eng/docs/ui_transfer_custom

To whom it may concern,

Your software is great, but I am having one problem. I would like VERY much to be able to set permissions for my HUGE files before I upload them to a server or during the upload or automatically change permissions for it somehow once uploaded. Is this possible?
Maybe I could set permissions for the parent file that applies to all the ones inside it???

Thanks!

P.S. I'm relatively new, so I'm sorry if the solution is obvious.