I get this too when trying to start a group chat with moderators, but the error I see when I select “Create group chat” is different:
An error occurred: Users is invalid
In the console, I see a 422 error.
On my personal site, I am able to start a group chat with moderators. I am the only moderator there so the create group chat indicates 1/20 members.
So this does feel like a meta specific problem, likely related to bot experiments.