The correct answer is The system setting for issue linking was switched off globally.

If the system setting for issue linking is turned off at the system level then users cannot create issue links anywhere in the instance and automation rules that add links will fail because the underlying linking capability is disabled. This is a global override that takes precedence over project permissions and app behaviour so it explains why both team managed and company managed projects are affected at the same time.

A marketplace app or automation script interfered with the linking functionality is unlikely because a third party app or script would rarely block core linking for every project and also block Jira native automation. Apps can cause problems but they do not typically flip the central system setting that controls linking.

The Link issues project permission was removed from every project permission scheme is unlikely because team managed projects do not use shared permission schemes and they would not be impacted by removing that permission from schemes. Also removing that permission from schemes would not usually break automation across both types of projects at once in this way.

All link types were renamed in the instance is incorrect because renaming link types only changes labels and it does not prevent creating links. Automation failing and inability to add any links is not explained by renamed link types.

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