I found many closed, and unresolved, threads about not being able to remove “Missing Library” from the Team Library modal. I just discovered a solution that worked for my situation and wanted to share it.
The cause of my issue was a hidden layer that contained a library style from the missing library. After I revealed the hidden layer and changed the color value, the “Missing Library” was no longer showing in the “Libraries available in this file” section of the Teams Library modal.