I recently had a problem creating a virtual device with the updated dialog. The issue turned out to be the "Name the device" field label is greyed out as "disabled" (same color as the disabled "Create" button) so I didn't put anything in it. This is a required field so the device couldn't be created.
Feedback: Please don't make the "Name the device" field label disabled color, just make it regular. Thanks!
You need to select a device type first. There are many types of virtual devices. A virtual device cannot be created until a virtual device type is selected.
Unless I am misunderstanding the issue you're reporting.