Creating Blue/Green RDS Error: DB instance put into incompatible-restore state. RDS recommends that you initiate a point-in-time-restore

Question

I have PostgreSQL 11.22 running on RDS. It is a version which will not be supported soon, so I want to update to v16 but with minimum downtime. As AWS suggests I tried Blue/Green RDS. I followed these steps:

1. Made a snapshot

2. Created a "Custom Parameter Group" with the required settings (as described here)

   max_replication_slots

   max_wal_senders

   max_logical_replication_workers

   max_worker_processes

3. I restored a db from the snapshot and linked it to this group (again with postgres v11.22, but same thing happened when I tried with v16.1)

4. I selected the DB from the admin panel, and clicked "Create Blue/Green Deployment". It starts creating it, then it creates the Green instance, but then both of them have red status.

After the creation of the "Blue-Green Deployment" it turns to status - Invalid configuration

The Green instance status turns into Incompatible-restore.

In the logs for it - the only error there is goes like this:

DB instance put into incompatible-restore state. RDS recommends that you initiate a point-in-time-restore.

The Blue instance has Automated Backup turned on, but the Green one no (not sure if it is supposed to have it, but there is no way to specify it neither).

Any clue what is going wrong?