Issue Details
we faced an issue when trying to create fodler and Files
Cause
when futher investigating, The Modern Sites and scripting not allowing updating Site property bag.
Resolution
Run this scrip then you can create folder and upload files
1. Connect to the Site using SharePoint Management PowerShell as shown in the below command line.
Connect-SPOService -Url https://<tenantname>-admin.sharepoint.com
2. Run the below script to turn off NoScript on the modern site. After sucess, try to upload images to Style library and it should work fine.
Set-SPOSite -Identity https://<SiteUrl> -DenyAddAndCustomizePages 0