Issue Description
The issue occurs when you are trying to site with template GROUP#0 using SPO PowerShell module. Below is the screen shot for reference.
Reason
The SPO PowerShell version do not support creating sites with “GROUP#0”.
A brief information about sites with template “GROUP#0’. When you create a team it in turn creates a SPO site with template “GROUP#0’. If you want to create SharePoint site and may be in future it might need a team, then it would be a case to create a site first and turn off the teams for it. Later on you can turn on the teams, by clicking on the link that appears on the quick launch.
Fix
For creating the sites with “GROUP#0” with currently no teams associated, use the PnP PowerShell module command.
New-PnPSite -Type TeamSite -Title "SITETITLE" -Alias "SITEALIAS" -Description "SITEDESCRIPTION" -Owners "SITEOWNEREMAIL"
References