This error occurs because Microsoft enforces limits on hosted parallel jobs, especially for free-tier Azure DevOps organizations. Even though you see "Parallel job count: 2" in the organization settings, free-tier organizations need to request free parallelism manually. You can request Free Parallelism for Your Organization
You can refer to Azure DevOps Parallelism Request and request to enable the free pipeline agent.
Kindly note - Approval may take a few business days and until approval, Microsoft-hosted agents will not run your pipeline.
Reference Microsoft document