Amit,
Thanks for responding so quickly. Here are the answers to your questions.
Can you describe whether you created the LRS dataset using ArcMap or ArcGIS Pro?
I created this LRS in ArcMap.
I had previously created another LRS in ArcGIS Pro and this published correctly.
What version of ArcGIS Enterprise (Server) are you running?
Everything is version 10.8.1 - ArcGIS Enterprise (Portal, Server, Etc) and ArcMap.
Can you share a screenshot from the Server Authorizations page?
I can't at the minute, I don't have access to the customer's machine - I can't get this until next Tuesday.
If it helps - everything has been licensed and works when publishing from Pro.
Jonathan.