I know this is a really old thread, but I just ran into this same issue today and I thought my comments may be of help to someone in the future. I ended up going into the environment settings to get rid of the Z and M values. I used the Feature To Polygon (Data Management) tool. Then in the Environments settings of the tool I set the M Values to "Disabled" and I also set the Z Values to "Disabled".
As a side note I recommend using the feature to point tool first to get the attributes into a point feature class. Then in the Feature to Polygon tool, you can add the point feature class in the "Label Features" section. This makes it so the new polygon feature class still has all of the correct attributes as well as being a plain polygon without Z or M values.
