Checking the database service logs you identify the following:
INFO May 15 14:54:39.664 1904 database 75b864bd48-zzc6n [INFO] Instance status: available
INFO May 15 14:54:44.856 1904 database 75b864bd48-zzc6n [INFO] Updating instance settings for dxpcloud-rzzjdmdfxrevzbmjif-tnmscjjytqvleijjgx: {"settings":{"databaseFlags":[{"name":"character_set_server","value":"utf8mb4"},{"name":"interactive_timeout","value":"30000"},{"name":"max_allowed_packet","value":"1073741824"},{"name":"wait_timeout","value":"10000"},{"name":"thread_cache_size","value":"96"},{"name":"query_cache_type","value":"1"},{"name":"query_cache_size","value":"67108864"},{"name":"innodb_lock_wait_timeout","value":"15"},{"name":"max_connections","value":"50000"},{"name":"table_open_cache","value":"100000"}],"edition":"ENTERPRISE"}}
INFO May 15 14:54:45.199 1904 database 75b864bd48-zzc6n [INFO] Updating instance settings for dxpcloud-rzzjdmdfxrevzbmjif-database-2: {"settings":{"databaseFlags":[{"name":"character_set_server","value":"utf8mb4"},{"name":"interactive_timeout","value":"30000"},{"name":"max_allowed_packet","value":"1073741824"},{"name":"wait_timeout","value":"10000"},{"name":"thread_cache_size","value":"96"},{"name":"query_cache_type","value":"1"},{"name":"query_cache_size","value":"67108864"},{"name":"innodb_lock_wait_timeout","value":"15"},{"name":"max_connections","value":"50000"},{"name":"table_open_cache","value":"100000"}],"edition":"ENTERPRISE"}}
ERROR May 15 14:54:45.216 1904 database 75b864bd48-zzc6n [ERROR] Error: The requested flag is either misspelled or unsupported by this database type.
at Gaxios._request (/lcp/app/database/node_modules/gaxios/src/gaxios.ts:172:15)
at process.processTicksAndRejections (node:internal/process/task_queues:95:5)
at async Compute.requestAsync (/lcp/app/database/node_modules/google-auth-library/build/src/auth/oauth2client.js:429:18)
at retry (/lcp/app/database/src/api/google-api.ts:455:24)
at GoogleApi.updateInstanceSettings (/lcp/app/database/src/api/google-api.ts:273:14)
at InstanceManagerGoogle._maybeUpdateInstanceSettings (/lcp/app/database/src/manager/instance-manager-google.ts:317:7)
at InstanceManagerGoogle.updateInstanceSettingsCustom (/lcp/app/database/src/manager/instance-manager-google.ts:78:7)
at InstanceManagerGoogle.updateInstanceSettings (/lcp/app/database/src/manager/instance-manager.ts:57:28)
at InstanceManagerGoogle.startOrCreate (/lcp/app/database/src/manager/instance-manager.ts:193:20)
at async Promise.all (index 0)