Replication policy 'XYZ' does not allow incoming replications to be configured.
The issue is caused by the 4.0.x interoperability with 4.1. The 4.0.x plug-in communicates with the 4.1 Cloud Service by using version 4.1 instead of 4.0.
As a result, 4.0 receives unexpected responses. For example, in 4.0 the policies have "allowIncoming" and "allowOutgoing" fields.
In 4.1 these fields are removed, causing the 4.0 code validating the policy to incorrectly assume that replications are not allowed while they are allowed.