What is the problem?
With the new Access Control, Read-Only users cannot be created. This is because every user created is forced to have the User's group associated with the account. This overrides all the settings in Read-Only users.
What did you already try to solve it?
Tried to create a normal user and a read-only user, unchecked the default option for the User's group as well.
Screen shots of the errors. Logs have no information regarding this issue.
Additional information about your setup
Octoprint 1.4.0, OctoPi 0.17.0, Raspberry Pi 4 with Raspbian, Prusa i3 MK3S 3.8.1, Brave browser on Windows 10, also Safari on MacbookPro.