C-Enter does not create new heading in org mode (iTerm mac)

### What did you expect to happen?

When I press C-Enter at a heading in org mode, I expect a new heading to be created.

### What actually happened?

A new heading is created when I open the GUI emacs (in the Applications folder). However when I open emacs using "emacsclient -c", it does not work. I get the following error
`Window system frame should be used`

### Describe your attempts to resolve the issue

I get the following backtrace when I enable debug-on-error
```
Debugger entered--Lisp error: (error "Window system frame should be used")
clear-image-cache()
org-format-latex("/Users/abcd/.emacs.d/.local/cache/org-latex/or..." 516686 516816 "/Users/abcd/Dropbox/org/" overlays nil forbuffer dvipng)
org--latex-preview-region(516686 516816)
(if (or image-overlays latex-overlays) (org-clear-latex-preview beg end) (org--latex-preview-region beg end))
(let* ((beg (if (org-before-first-heading-p) (line-beginning-position) (save-excursion (org-back-to-heading) (point)))) (end (if (org-before-first-heading-p) (line-end-posit$
(let nil (cond ((memq (and (boundp 'org-goto-map) org-goto-map) (current-active-maps)) (org-goto-ret)) ((and (fboundp 'toc-org-insert-toc) (member "TOC" (org-get-tags))) (to$
(cond ((memq type '(citation-reference citation)) (let nil (org-cite-follow context arg))) ((eq type 'headline) (let nil (cond ((memq (and (boundp ...) org-goto-map) (curren$
(let* ((context (org-element-context)) (type (org-element-type context))) (while (and context (memq type '(verbatim code bold italic underline strike-through subscript super$
(if (button-at (point)) (call-interactively #'push-button) (let* ((context (org-element-context)) (type (org-element-type context))) (while (and context (memq type '(verbati$
+org/dwim-at-point(nil)
funcall-interactively(+org/dwim-at-point nil)
call-interactively(+org/dwim-at-point nil nil)
command-execute(+org/dwim-at-point)
```

### Steps to reproduce

1. Open emacs using "emacsclient -c" in iTerm
2. Jump to an org mode file
3. Go to any heading.
4. Press C-Enter

### System Information

https://pastebin.com/JzudVydk