Unable to save. This form can’t be saved due to a custom setting error in Dynamics 365 / Dataverse.

Recently we got the below error while trying to assign the record.

Unable to save. This form can’t be saved due to a custom setting.

Turned out we had certain conditions in the OnSave event for the form, and if the record satisfies those conditions we were canceling the save event using

executionContext.getEventArgs().preventDefault();

So it was the expected behaviour, just that the error message was a bit generic.

Hope it helps..