"System Policy prohibits use as a Hotspot" when trying to turn on WiFi hotspot (option grayed out)
Solution 1:
reported here, try switching to another settings panel (ie "Network") and then back, it seems to enable the option again for most.
Solution 2:
It's only periodically disabled; to re-enable simply click on the "Network" in the left pane - making sure the OS realises you have a network connection. Then go back to WiFi and voila you have the ability to create a WiFi HotSpot. You don't have to create a separate network for this.