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Hello.
Your Lightsail instance's quota may be set to a lower value than the default value of 20.
Even if the quota screen shows 20, the actual number may be lower.
Therefore, please try applying for quota upper limit relaxation from the service quota screen.
https://docs.aws.amazon.com/general/latest/gr/lightsail.html
New AWS accounts might start with quotas that are lower than those described here.
You can apply from the URL below.
https://console.aws.amazon.com/servicequotas/home/services/lightsail/quotas/L-4259AF9B
Is your account particularly new, like 1 or 2 days old? If it is then it's possible there might be a temporary cap on the number of instances that you can create, just while your account is fully initialised and billing methods are validated, etc.
If your account is long-standing and you're seeing this error your best course of action is to uplift the Lightsail quota to 20. But if your LIghtsail quota is already at 20 then consider logging a billing support case https://docs.aws.amazon.com/awsaccountbilling/latest/aboutv2/billing-get-answers.html#billing-support
This scenario looks similar to yours, and a billing support case was required to resolve it https://stackoverflow.com/questions/64169732/sorry-youve-reached-your-maximum-limit-of-lightsail-instances-2
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This is literally crippling my client right now. We spun up an AWS account for him a few months ago, created 2 lightsail instances for his business with snapshots enabled - today we needed to restore from backups, i literally cannot create an instance because AWS wont let me saying the quota is capped.
There are 4 vCPU's, it says the cap is 20, and blocks creating a restoration from snapshot because "quota is capped" this is absolute garbage on AWS's part.