@clong1 I have had the same issue. After nearly 4 hours on chat/phone I was ultimately told that even though it says that Time tracking only users "don't count toward your user limit," it actually does. 

The agent told me I would need to upgrade our subscription in order to add more users to the time tracking only category. I think the better solution is to state that you are limited to time-tracking users based on your subscription...if this is indeed the case.