When you try to Create New Workspace, the Create New and All Workspaces buttons are grayed out. The sync icon on the top right will appear grayed out when the sync is disabled/off.
When the sync is disabled/off the workspaces cannot be created and collections will remain local. You would be required to connect to an internet which should enable the sync (icon turns orange). Once the sync is ON, you should be able to create a new workspace. You should be able to see this message when you switch to Team Workspace.
Note: You will be able to create workspace only after you sign in.