To allow the student to resubmit in a Live Session the student will need to be 'restarted' from the assignment overview. Click the 3 dots next to a students name and select 'Restart Student'.
Note: When you restart a student it will reset all reviews for the student, too!
This is what the student will see after they are restarted:
From here, they will have the option to remove their current submission and submit a new version of the file. They will have to remove the old file first.