Hello, Mike,
As of now that is by design and will be improved in upcoming versions.
Also since 13.1 the wizard pre-selects None and shows a note about this when four-eyes authorization is enabled.
The Add New User wizard in Host Management creates the local appliance user, then asks the backup server to assign the selected VBR role, which creates the user in Veeam Backup & Replication. The wizard talks to the backup server over the REST API, which cannot create approval requests, so the backup server rejects the user creation outright.
To work around it, select None at the VBR Role step so the wizard only creates the local user. Then add that user under Users & Roles > Security in the
backup console. This creates an approval request for another Backup or Security Administrator to approve under Home > Pending approvals.