Instance launch failed The requested configuration is currently not supported. Please check the documentation for supported configurations

As per https://aws.amazon.com/about-aws/global-infrastructure/localzones/locations/ Santiago is available, is this what you're using?

Only specific EC2 types and sizes will be available. For example the Perth Local Zone that just launched a few days ago has only 5 possible type/size combinations; C5 is listed but actually only c5.2xlarge is available, no other sizes. Best to check on the EC2 Pricing page what's available for your Local Zone and try spinning up one of those.