I've noticed this in a couple games. The AI is super pissy about letting you settle cities in this version.
> Be me
> Settled my 2nd city 7 tiles east of my

Capital
> Immediately get warned not to settle cities in land he considers his by Timur (nearest city is 8 tiles away, his

capital is 12 tiles east of my new city)
> Immediately get warned not to settle cities in land he considers his by Sheiksh I (nearest city is his

capital 9 tiles northeast of my new city)
> Immediately get warned not to settle cities in land he considers his by Wu Zetian (nearest city is 10 tiles away, her

capital is 12 tiles south of my new city)
> Tell them all to go fly a kite and I'll settle where I damn well please
> Whole continent is mad at me except America
> America is chill bro who gives me dyes (

capital is 10 tiles north of mine; my closest neighbour by absolute distance, but he DoF'd me super-fast)