I am unable to create any new z/OS datasets.

Type: Bug

User ID: Z81075
I am unable to create any new z/OS datasets.
Creating both PDS (Z81075.CBL) and PS datasets fails with HTTP 500:
“Dynamic allocation Error - SMS or ACS services returned an error.”
Restarting the environment did not resolve the issue.
Please check/reset the dataset allocation or SMS/ACS configuration for my IBM Z Xplore user.

VS Code version: Code 1.136.1 (a44adf7f53e00964ab890f9f8758a334f1fc15bc, 2026-09-03T05:06:41Z)
OS version: Windows_NT x64 10.0.26300
Modes:

System Info

|Item|Value|
|---|---|
|CPUs|11th Gen Intel(R) Core(TM) i5-11300H @ 3.10GHz (8 x 3110)|
|GPU Status|2d_canvas: enabled
GPU0: VENDOR= 0x8086, DEVICE=0x9a49 [Intel(R) Iris(R) Xe Graphics], DRIVER_VENDOR=Intel, DRIVER_VERSION=30.0.101.1338 *ACTIVE*
GPU1: VENDOR= 0x1414, DEVICE=0x008c [Microsoft Basic Render Driver], DRIVER_VERSION=10.0.26100.8951
Machine model name:
Machine model version:
direct_rendering_display_compositor: disabled_off_ok
gpu_compositing: enabled
multiple_raster_threads: enabled_on
opengl: enabled_on
rasterization: enabled
raw_draw: disabled_off_ok
skia_graphite: disabled_off
trees_in_viz: disabled_off
video_decode: enabled
video_encode: enabled
webgl: enabled
webgpu: enabled
webnn: disabled_off|
|Load (avg)|undefined|
|Memory (System)|7.79GB (0.70GB free)|
|Process Argv|--crash-reporter-id 6ff28e04-5143-4ee5-b855-94e967a4b72c|
|Screen Reader|no|
|VM|0%|
Extensions (2)

Name|Identifier|Author|Version
---|---|---|---
IBM Z Open Editor|ibm.zopeneditor|IBM|6.7.0
Zowe Explorer|zowe.vscode-extension-for-zowe|Zowe|3.5.1

A/B Experiments

```
vsliv368cf:30146710
binariesv615:30325510
nativeloc1:31344060
dwcopilot:31170013
dwoutputs:31242946
copilot_t_ci:31333650
e5gg6876:31282496
pythonrdcb7:31342333
6518g693:31463988
aj953862:31281341
envsactivate1:31551504
cloudbuttont:31379625
3efgi100_wstrepl:31403338
ec5jj548:31422691
cp_cls_t_966_ss:31526232
4je02754:31466945
8hhj4413:31478653
cp_cls_c_1081:31454833
conptydll_true:31498968
e9c30283:31461165
46204921:31447328
ei9d7968:31496641
chat:31457767
23c7c724:31520045
ddid_t:31478206
hmra_i5g22:31518061
7df3h592:31512476
cp_cls_t_1082:31535311
logging_enabled_new:31498466
j0d79568:31499440
jb_cp_cls_t_632:31543129
56dj4588:31512888
32d76977:31512328
ha629193:31508444
a1ije391_t:31540920
jbcp_cls_pctr_t:31531130
cp_intellij_t_nes:31548657
gf14b233:31526830
ahp-both-windows:31556933
ihg5j128:31534457
7g2b5551:31542111
enable_editor_pane_layout:31569726
allow-none:31555437
ac562147:31564510
c7c27ce7:31554789
1h923230:31564177
0dg73464:31554319
treatment-23-1:31555779
unuse_dynamic_mcp:31555281
0d8dfbc3:31570291
a1hcc538:31559322
0c1h4866:31566224
vrbsty_fls:31561059
session-archive:31558132
5b8j3302:31564601
mangle-name-control:31572633
39a5d156:31574986
2bfb8b39:31576696
permission_prompt_treatment:1332566
ccr_pr_nudge_control:1319470
vsc_wsm_t:1340632
eh853263:1370294
auto_mode_control:1367906

```