Can you try to remove the duplicate search step, save the case type, and then add the duplicate search step again? If it still fails, please write to firstname.lastname@example.org, with your full exercise system URL, so that we can have a look at it.
I have seen this issue when teaching the SSA course. It seems there is an issue with the Case Match rule that is being created behind the scenes when you configure the duplicate search case step on the case lifecycle designer.
To fix the issue, first, delete the Search duplicate cases step. Then navigate to the App Explorer and delete the Case Match rule created under the Decision category. You should be able to add the step and configure it properly. I am not quite sure what is causing the issue right now but this is a work around.