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Is your account part of an AWS Organization? There's a chance that a service control policy is limiting permissions. See https://aws.amazon.com/premiumsupport/knowledge-center/batch-invalid-compute-environment/ for more detail
answered 2 years ago
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Yes it is, I will review this
This was it! There was an org policy that required certain tags, I needed to include these tags in the launch template to be propagated to the instance