I should have read the 9.7.0.1 release notes more closely:
- Cannot create more than one vApp network as an organization administrator
As an organization administrator, you cannot create more than one vApp network and you cannot fence or unfence vApps by using the HTML5 tenant portal. The problem occurs when you have an existing fenced network connected to an organization VDC network, and you try to create a new one.
I have verified in the lab that 9.7.0.1 fixes this issue.