Using New Outlook on Windows for personal email, calendar, and contact management
Are you using a personal Outlook.com account or a work or school Microsoft 365 account, and does the error happen only in new Outlook or also in Outlook on the web at outlook.com?
As a quick check, make sure you are signed in with an Outlook.com, Microsoft 365, or Exchange account, then try signing out of the new Outlook and signing back in, or temporarily switching back to classic Outlook to confirm the contact can be created there. You can also try resetting the new Outlook app and checking for updates.