This is because SEQUENCE is a dynamic array function that produces a spilled array, and Excel tables aren't compatible with results generated in this way.

Learn Excel’s Sequence function to generate numbers, dates, and custom formats effortlessly. Work smarter and faster with this guide ...

Excel Tricks & Tips TL;DR Key Takeaways : Excel’s SEQUENCE function automates numbering, dynamically adjusting as data changes, saving time and reducing manual errors.