GKE does the creation of the VMs and setup of them, joining them to the cluster and applying labels for example.

The specific issue appears to be about creating new "node pools". Creating standard VMs in GCP works fine however, so this is specific to GKE and their internal tooling that integrates with the rest of GCP.

GKE doesn't (at least to my knowledge) allow you to create VMs separately and join them to the cluster in any kind of easy fashion.