Autoscaling group cannot update capacity despite sufficient service quota being available.

The issue you're experiencing is not related to your service quota, but rather to the availability of Spot Instances in the AWS region where you're trying to launch them. Even though you have sufficient quota available, the error message indicates that AWS is unable to fulfill your Spot Instance request due to the current capacity constraints.

The error "UnfulfillableCapacity - Unable to fulfill capacity due to your request configuration" suggests that there aren't enough available p3.8xlarge Spot Instances to meet your request at the current Spot price in the specified Availability Zones.

To address this issue, you can try the following:

1. Expand your instance type selection: Instead of relying solely on p3.8xlarge, consider including other instance types with similar capabilities in your Auto Scaling group configuration. This increases the chances of finding available capacity.

2. Use multiple Availability Zones: If you haven't already, configure your Auto Scaling group to use multiple Availability Zones. This increases the likelihood of finding available Spot capacity.

3. Implement a mixed instances policy: Use a mix of On-Demand and Spot Instances to ensure some level of guaranteed capacity while still leveraging cost savings from Spot Instances when available.

4. Adjust your Spot price bid: If you've set a maximum price for Spot Instances, consider increasing it to improve your chances of obtaining instances.

5. Use Capacity Rebalancing: Enable this feature in your Auto Scaling group to proactively seek new Spot Instances when your existing instances are at elevated risk of interruption.

6. Consider using Capacity Reservations: If your workload requires guaranteed capacity, you might want to use Capacity Reservations for a portion of your instances.

7. Monitor and retry: Keep monitoring the situation and retry your request after some time, as Spot Instance availability can change rapidly.

Remember, even with sufficient quota, the availability of Spot Instances is subject to real-time supply and demand in the AWS ecosystem. The error you're seeing is a normal part of working with Spot Instances and doesn't indicate an issue with your account or configuration.
Sources
EC2 Autoscaling Group not capacity tracking vCPU | AWS re:Post
Error: Launching EC2 instance failed | AWS re:Post
Why is my Auto Scaling group not launching new instances when the load increases? | AWS re:Post