Unable to create new users even with enough licenses

When trying to create new users you get the error described below, even when there are enough licenses in the Google Workspace subscriptions.

You have reached the user limit for your organization. Please contact your super admin for further assistance.

• Admin console
• License settings

1. Log in to the Admin console.
2. Navigate to the Main menu > Billing > License settings.
3. Click on the service you want to assign licenses for, in this case Google Workspace.
4. You will see that the one that no longer has licenses has auto licensing turned On.
5. Choose which subscription to use for automatic license assignment.
6. Click Save.
   • Once the subscription which has available licenses has auto licensing turned on, you will be able to create new users that will be automatically assigned with one of those licenses. 

This error message appears when the Google Workspace subscription that has auto licensing turned on, does not have enough licenses, even when there are available licenses in another Google Workspace subscription in the account.