Cannot create Local User when LDAP Federation is enabled

The following error occurs when creating a new user by the admin, or importing from an IDP.
I would expect that when syncRegistrations is set to off I can create users that do not exist in the directory.

13:58:25,743 WARN [org.keycloak.events] (default task-13) type=UPDATE_PROFILE_ERROR, realmId=dev, clientId=nmdb-dev, userId=null, ipAddress=127.0.0.1, error=invalid_user_credentials, identity_provider=oidc, auth_method=openid-connect, updated_email=dimiter.todorov@filtered, redirect_uri=https://ljpapi.todorov.ca/, identity_provider_identity=l00KWf8qPvd2AuwdNhRuRKq1HEM98WhqazYiLv2oSK8, code_id=WqDUHUgeJi7aI73auoPXNIZZE8KLGZQg6bJF4KTQ6Yk, authSessionParentId=ebae5b87-b8e2-4eca-87b0-48f401e79207, authSessionTabId=Hn28vurlLyE
14:01:33,913 ERROR [org.keycloak.storage.ldap.idm.store.ldap.LDAPOperationManager] (default task-15) Could not query server using DN [DC=FILTERED] and filter [(&(|FILTERED]: javax.naming.NameNotFoundException: [LDAP: error code 32 - 0000208D: NameErr: DSID-03152973, problem 2001 (NO_OBJECT), data 0, best match of:

The federation config looks like:

{
	"id": "92c32616-57a3-4062-96f1-cd2964d35766",
	"name": "ldap-cihs",
	"providerId": "ldap",
	"providerType": "org.keycloak.storage.UserStorageProvider",
	"parentId": "dev",
	"config": {
		"pagination": ["true"],
		"fullSyncPeriod": ["604800"],
		"usersDn": ["DC=mydomain"],
		"connectionPooling": ["true"],
		"cachePolicy": ["DEFAULT"],
		"useKerberosForPasswordAuthentication": ["false"],
		"importEnabled": ["true"],
		"enabled": ["true"],
		"bindCredential": ["**********"],
		"changedSyncPeriod": ["86400"],
		"bindDn": ["cn=srv.opsware.ad,OU=Tools and Automation,OU=SomeOU,DC=mydomain"],
		"usernameLDAPAttribute": ["userPrincipalName"],
		"lastSync": ["1582785704"],
		"vendor": ["ad"],
		"uuidLDAPAttribute": ["objectGUID"],
		"connectionUrl": ["ldap://ldapglobal:3268"],
		"allowKerberosAuthentication": ["false"],
		"syncRegistrations": ["false"],
		"authType": ["simple"],
		"customUserSearchFilter": ["(|(memberOf=CN=NMDB_ADMINS,OU=TORCA,OU=Tools and Automation,OU=SomeOU,DC=mydomain)(memberOf=CN=TORCA_ALL_USERS,OU=TORCA,OU=Tools and Automation,OU=SomeOU,DC=mydomain)(memberOf=CN=NMDB_READERS,OU=TORCA,OU=Tools and Automation,OU=SomeOU,DC=mydomain)(memberOf=CN=NMDB_WRITERS,OU=TORCA,OU=Tools and Automation,OU=SomeOU,DC=mydomain))"],
		"debug": ["false"],
		"searchScope": ["2"],
		"useTruststoreSpi": ["ldapsOnly"],
		"priority": ["0"],
		"trustEmail": ["true"],
		"userObjectClasses": ["person, organizationalPerson, user"],
		"rdnLDAPAttribute": ["cn"],
		"editMode": ["READ_ONLY"],
		"validatePasswordPolicy": ["false"],
		"batchSizeForSync": ["1000"]
	}
}