On further investigation i understand that a hidden feature needs to be activated. Feature id is 3bc0c1e1-b7d5-4e82-afd7-9f7e59b60c0a.I dont have Powershell experience but I tried to activate feature with SharePoint Online Management Shell. I used [Connect-SPOService -Url https://contoso-admin.sharepoint.com -credential firstname.lastname@example.org] command to set up the connection but got an error. I have SharePoint admin rights and not Tenant admin. How can i activate the feature with my permission level?
I tried to deactivate all the features of my old site before saving it as a template and tried to create site of this template. I still run in to the same error.