For posterity:
While running through the hacking.md doc, I mistakenly tried to register my spindle instance, on port 6555, as a knot. The knot page allowed it to be verified, but when I went to create a repo it complained about xrpc incompatibility, because it's not a knot.
Akshay mentioned that it's probably because the xrpc can talk to the spindle and get xrpc/sh.tangled.owner as part of the verification flow, but there's no further verification that the service is actually a knot.
While going through hacking-on-tangled doc, I setup my local environment, ran the VM for a knot, verified that it was added and when I go to create a new repo I get "xrpc not supported on this knot" as an error in the repo/new page.
Updated title / body to reflect a potential bug