I did not suggest to convert one, what I said was, select to create a new one, by default it suggests sandbox, I said to change it to developer ijn the drop down, not create one and convert it, because thats not possible.
As for those errors now its a couple of possibilities
1) you do not have a Pay as you go set up to pay for AI (which are not Copilot Credits)
2) you do not have a trial that covers AI Builder
3) you do not have physical space in the Dataverse/Log/Files sections which you would need to look at as it says its a capacity issue which looks more to be the issue in that picture.
You have to go to the admin, look at each environment, which you can click on Dataverse, then it will give you a list of all the environments and their capacity usage, then you can select one of the ones above, and see what each one has allocated too it.
It is very possible you simply to do not have the storage for more environments. I would have to see your admin center picture of all capacity across your environments to validate. By default they will be setup to use capacity automatically BUT if you are already over or close then it won't work.
If these suggestions help resolve your issue, Please consider Marking the answer as such and also maybe a like.
Thank you!
Sincerely, Michael Gernaey