Google Play Instant Error Uploading - Your App Is Not Instant Enabled

Question

i have a multi module project. I created a new module called Instant and in its manifest I enabled the instant app entry point. It looks as below

<?xml version="1.0" encoding="utf-8"?>
<manifest xmlns:android="http://schemas.android.com/apk/res/android"
    xmlns:dist="http://schemas.android.com/apk/distribution"
    android:targetSandboxVersion="2">

    <dist:module dist:instant="true" />

    <application ..>
        <activity
            ..>
            <intent-filter>
                <action android:name="android.intent.action.MAIN" />
                <category android:name="android.intent.category.LAUNCHER" />
            </intent-filter>
            <intent-filter android:autoVerify="true">
                <action android:name="android.intent.action.VIEW" />

                <category android:name="android.intent.category.DEFAULT" />
                <category android:name="android.intent.category.BROWSABLE" />

                <data android:scheme="http" />
                <data android:scheme="https" />
                <data android:host="..." />
            </intent-filter>
        </activity>
    </application>

</manifest>

It's pretty much like this repo. I can build the app in both installed and instant version on Android Studio. I created an app bundle and tried to upload it to the instant app track in closed testing. Google Play won't let me upload my instant app and is saying your app bundle is not instant enabled. What is wrong here? Is it because I didn't use "Instant Dynamic Feature" module?