Diagnosis
You are using the wrong app. The Arlo Essential Indoor 2nd Gen requires the newer "Arlo Secure" app, not the legacy "Arlo" app.
How to Fix It
Uninstall any existing Arlo app. Download "Arlo Secure" from your device's official app store. Create a new account or log in with your existing Arlo credentials. Start the setup process fresh in the Arlo Secure app.
If That Didn't Work
Your camera may have been previously registered to another account. Perform a factory reset by holding the camera's reset button for 15 seconds until the LED flashes amber. Then try adding it again in the Arlo Secure app.
Heads Up
Do not mix apps. The legacy Arlo app will not recognize or properly manage this newer generation of hardware.