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I am having exactly the same issue. I have screen sharing enabled, my setting looks exactly like the image you provided. I can share when I'm in a meeting alone but as soon as a participant joins I get that message.
Take a closer look at the setting just below the one in my red box... that one prevents sharing when guests (unauthenticated users from your account) join a meeting. Make sure that this setting is not enabled. It may be the cause of your issue.
If this has answered your question, please click the Accept as Solution button below so that others in the Community may benefit as well.
Are you using Zoom on a personal computer or your work computer? It is possible that your company has disabled this setting through Group Policy or installer settings.
If you sign in to the same Zoom account on a different computer or mobile device does it work?
It was in admin settings but I went to personal and it was disabled. I think it's now fixed! I didn't even know there were two settings as I'm the only user on this account.
Thank you so much for the help.