Hi,Emily R-W
Welcome to the Microsoft Community, and we'll be happy to help you.
Understanding that you are having problems with Loop.
Microsoft Loop is still in beta, so many features still need to be improved.
Additionally, because Loop is an enterprise-oriented application, this may be caused by certain settings or permissions controlled by an organization's IT administrator. You will need to contact your administrator to confirm this.
Apart from that, it seems that you are a business user, Microsoft Community only offers support for individual users. So it is more suitable for publishing on Microsoft Learn, there are experts who can provide more professional solutions in that place.
Here is a link to the forum where you can raise specific scenarios and share your idea to help solve the problem.
Get support - Microsoft 365 admin | Microsoft Learn
Of course, on a personal note I would like to help you with your problem and I can give you some suggestions:
Sign in to the Microsoft 365 Administration with a global administrator account.
Go to Settings > Organization Settings > Services.
Under Services, find and turn on the Recycling service.
Wait a few minutes for the changes to take effect.
Check that the coworker you are trying to add has a valid Microsoft 365 subscription and is signed into their account.
Make sure you have the permissions you need to add members to your workspace. You can check this by going to Workspace Settings and verifying that you have the Manage workspace members permission.
Try adding colleagues using their email address rather than their name and vice versa.
Sincerely hope that your question will be dealt with appropriately after contact the correct department.
I wish you good health and all the best
Zoro-MSFT | Microsoft Community Support Specialist