Everything was working great in Survey123 drag and drop form design then all of a sudden we are unable to create forms using drag and drop. See picture for warning we get when trying.
Based on that error message, could you confirm if you are tryiing to create survey123 on a portal instead of AGOL? And do you enable use shared theme in org settings?
We have an issue with enabling use shared theme in org settings on portal and cause an issue to create new survey. This issue will be addressed in 3.13 release.