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I am trying to set the approver for a SharePoint workflow as an Outlook mailbox. So, it means that all the people who are members of that outlook mailbox (not distribution list) should be able to open the task and approve that workflow item. I have given the approvers DESIGN permissions to the SharePoint site, list and workflow tasks. But they are still not able to approve it through that shared mailbox. It says 'Task cannot be completed'. Though, when I set the individuals of that mailbox as the approvers, they can approve but not if the shared mailbox is set as the approver.

Looking for some guidance if it's about managing permissions for any SharePoint group, Domain group or the way the workflow should be set up.

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I suspect that your issue is caused by a group mailbox not being on the Active Directory. As a consequence it is unable to log the response to an approval as it requires this to trace the approval. If you think about it using a group mailbox removes traceability and it would be sensible to prevent being able to do this.

As an alternative you can use parallel approval workflow with some conditional logic as proposed here

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