I realized that today, too. If wifi is on and I try to turn on hotspot, it will turn itself off again with said "error".
However, when I turn off wifi first and then turn on hotspot it works. I tried connecting with my laptop, no problem, had internet access.
Then when I turn on wifi again, the hotspot will turn off.
I am still running Test 9 at this moment I will flash test10 and report back again.
EDIT: also works for me in test10
A few days ago I reported issues with my earspeaker, I was able to resolve that problem. A few days before I dropped my phone (not from hi