Problem with Create Team functionality

I am having trouble figuring out how exactly the Create Team capability inside a users profile is supposed to work. Enabling the same is not letting me create a team when the
Team Creation option is disabled inside the Arcane settings, though the tournaments works perfectly fine.

PFB the steps to replicate the same.

1. Disable Team Creation inside Team Wars section from Arcane in WP Admin
2. Enable Allow user to create teams inside any users profile
3. Check if the option to Create a Team is enabled.

Any help would be appreciated.