This behavior is corrected in the 2021-08-04 deploy.
Known issues indicate notable behaviors that has been escalated to the Canvas engineering team. Known issues are not a guarantee for an immediate resolution. This document is for informational purposes only and does not replace the Support process. If you are encountering the behavior outlined in this document, please ensure you have submitted a Support case (per your institution's escalation process) so Canvas Support can adequately gauge the overall customer impact and prioritize appropriately.
In Classic Quizzes, a student submitted a quiz and received the "Regrade option not valid!" error. The attempt was submitted successfully and was visible to the teacher.
The Regrade option error should not display to students.