Cannot modify db instance when it's state is Available

If this persists I suspect you will need to open a support case. The forums are for community discussion and don't function well for individualized support (though sometimes you do get lucky and an AWS employee intervenes here).

While the support case answer is probably correct, paying for the support to tell AWS about a bug on their side is not in the budget. I can work around it if it gets to the critical stage but a quick fix would have been nicer.

This is a expected behavior and can be found in the below link-
"https://docs.aws.amazon.com/AmazonRDS/latest/UserGuide/CHAP_Storage.html#CHAP_Storage.AddingChanging"

After you modify the storage for a DB instance, the status of the DB instance is storage-optimization. The DB instance is fully operational after a storage modification. However, you can't make further storage modifications for either six hours or while the DB instance status is storage-optimization, whichever is longer.

It has been several days now and I'm still getting the same error, which I don't expect. The issue is that I believe is a bug is that the status of the DB instance is "available", usually I have seen it enter that state after "storage-optimization" is complete.

I eventually managed to resize the storage by converting the instance to Multi-AZ, then forcing a failover and convert back to single-AZ.