This problem isn't only affecting historic. My wife is getting the same error message trying to play one of the WotC pre-constructed decks (2021 issue). I looked at the deck selection screen, and it clearly shows which decks are allowed in Bo1 60-card (eg, Standard) Direct Challenge, and which are invalid. The deck she wanted to submit is definitely considered valid for play, so while I gather that there are issues in Direct Challenge with Historic decks, the problem seems to be more widespread.
This problem isn't only affecting historic. My wife is getting the same error message trying to play one of the WotC pre-constructed decks (2021 issue). I looked at the deck selection screen, and it clearly shows which decks are allowed in Bo1 60-card (eg, Standard) Direct Challenge, and which are invalid. The deck she wanted to submit is definitely considered valid for play, so while I gather that there are issues in Direct Challenge with Historic decks, the problem seems to be more widespread.