Michal Pipal Quickly checking the correlation ID, I found that the service is Basic SKU, and the request was timed out. There is a known issue with Developer SKUs as well as Basic SKUs where you may see a timeout when creating API Management services or performing any service updates such as adding custom domain, adding VNET etc. (impacted all regions).
Our product team is currently deploying a fix and ETA for the resolution is 10/20 (subject to change on other factors). Will keep you posted. Unfortunately, there is no workaround and retry may be successful. Sorry for the inconvenience caused by this issue.
I hope this helps and let me know if any questions.