The game shows an error in the top right corner, however it still allows you to press yes to the experimental prompt to create the world. If you generate the world, the custom dimension simply isn't available.
I'm not sure what combination causes this, but I was able to make it happen by removing the content of the settings key. JSON used attached.
You seem to be using the new custom world settings. This is experimental and unsupported. If applicable, try to reproduce the bug without a custom world.