Actually I think I see what the issue may be. The interface doesn't recognize that the Liaison (in this case "Student") is in the Wizards split pile.
So, if your only Liaison in the Kingdom is in a Split pile, it's not recognized at the setup stage and it removes and won't let you add an Ally. However when you hit "Ready" it appears to recognize that you have a Liaison in the split pile, but no Ally, thus the error.
Still no work around that I see, but maybe this helps pinpoint the issue for the developer.
So, if your only Liaison in the Kingdom is in a Split pile, it's not recognized at the setup stage and it removes and won't let you add an Ally. However when you hit "Ready" it appears to recognize that you have a Liaison in the split pile, but no Ally, thus the error.
Still no work around that I see, but maybe this helps pinpoint the issue for the developer.