The very same problem here also.
Adding custom domain (in app service) as wildcard "*.domain.com" gives error 'provided record set relative name 'asuid.*' is invalid'
Edit: I had to replace the * character with symbol ★ or else it is not displayed in the message.
When I try to add a custom domain (App Service) as a wildcard "★.sysdev.nl", the Azure Portal displays the error message:
Failed to assign custom domain ★.sysdev.nl on sysdev-appservice-website The domain name 'asuid.★.sysdev.nl' is invalid. The provided record set relative name 'asuid.★' is invalid.
I suspect that Azure Portal tries to add a CNAME record with hostname 'asuid.★' and that syntax is not allowed by the Azure DNS. The correct CNAME record is 'asuid' without the '.★' , that is what I read in the Azure documentation.
Maybe a bug in Azure Portal, because last week I was able to enter the wildcard domain without problems.
Thank you, Frank