For those of you still hitting this issue and using Conditional Access, please update your policies to also include the Loop app.
In early September, the Loop app was added to the list of apps that can be targeted in Conditional Access policies. So, you will still hit the create workspace issue if you haven't extended the existing policies to also include the Loop app.
Additionally, this post will be closed shortly so we can track the current set of issue blocking create workspace. A lot has changed since March 2023, so we need to make sure we aren't conflating current issues being faced with the previous issues. At this time, we are actively focused on create workspace issues caused in tenants that leverage Conditional Access. So please share those details. Also, if you are failing and not using Conditional Access, we still need those session ids.
We look forward to hearing from you and thanks for your patience.
Thanks,
Derek