Online character name invalid
This can happen if the very first character you try to create uses a name or has part its name on the restricted list. Every character you attempted to create after during that session will return the same message regardless if it is on the restricted list or not. It is a bug we are aware of and are investigating though there is not ETA on a resolution.
The typical work around for this is to close the game client out completely and start a new play session. You should then be able to create a new online character without issue. (As long as its name is not restricted for use. So it may happen again from time to time until the core bug is diagnosed and addressed.)
Copied word for word from the official Diablo II: Resurrected forum. Read the whole thread — and reply — on us.forums.blizzard.com. Get an alert for the next one