The assignment is failing due to the metadata property strongType in the policy definition, which allows for a user-friendly clickable drop down experience in the portal during assignment. It sends a tenant-level provider call which gets the latest API to populate the drop down. When that API is behind a feature flag, it is not enabled in all subscriptions, which causes the error.
In this specific scenario, the Insights RP just added a private preview API version behind a feature flag, which is preventing assignments through the portal for all policies that have a strongType for OMS workspaces. Product Group have a short-term mitigation to resolve the problem for Insights RP’s API this week and are actively looking at the design for a long-term solution to prevent this issue for other RPs in the future.
If the issue needs to be addressed immediately, one workaround until the fix is available would be to duplicate the definition and remove the strong type. This would require that the parameter be entered as an array of strings during assignment (instead of the user-friendly drop down).