I think I found the issues, there are 2.

1) The server dropdown looks grayed out even though it is useable.

So after selecting my connection there I can select a namespace

I'm used to this for non disabled dropdowns:

 

2)  However when I configure a server via the "configure server..." option on the New project screen I still get the error.

Here are my steps

1 Select "configure server..."

2 Type in an existing connection name, select "continue editing", click "Finish"

3. Get the error message and no namespaces