@Roopesh Bharatwaj KR Thank you for posting your question in Microsoft Q&A, apologize for any inconvenience caused on this.
I understand that you are trying to create the linux function app in the existing resource group and it is failing.
Creating function app to existing resource group has a set of limitations which were mentioned in this documentation and also it is suggested to create the function in new resource group rather than the existing one.
Hope this helps, let me know if you have any further questions on this.