I ran into the same problem. It’s easily solved by going into the Network Admin > Settings page. Look for the label “Add New Users” and make sure this option is checked: Allow site administrators to add new users to their site via the “Users → Add New” page.
Once you do this, the local admin will be able to add users. This is assuming they also have the capabilities list_users
and create_users
. I recommend this full list of related user capabilities be given:
list_users
create_users
promote_users
edit_users
remove_users
delete_users
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