The name of the lab is Creating Azure Resources. Following the steps in the lab while in the Azure cloud playground cannot be completed due to this error.
I also have the same problem
The lab was designed to be used with your own free Azure account. If you choose to use the Cloud Playground, you can use an existing resource group, which is part of the Cloud Playground. Any resource group is okay.
No you can’t create a resource group but you can at least create services (e.g. VM) within it. The resource group takes like 2 clicks to setup so you’re not really missing out on much.