Updating the status to “Try this instead” and have added the clarification that after 30 days the name is once again available.
The reason for this decision was that Channels can be restored 30 days after being deleted. During this time, we intentionally don’t support creating a channel with the same name. After the 30 days, the name is available.
You can workaround this by restoring a deleted channel, renaming it, and then deleting the channel again. The previous name is then available for use.
This workaround has already been mentioned in the comments and if an immediate reuse of a Channel Name is required, this is the recommended solution.
This is an absolute pain. Do Microsoft have any plans to sort this?
We are still considering this feature for future releases, and will continue to update the status when it changes.