Hello @daniel28,
Welcome to the Auth0 Community!
Based on my observation, the first thing that came to mind in the described flow is the fact that users cannot be added to the Organization in question based on your current settings, and since belonging to the Organization is required for a successful login, this creates the issue.
My recommendation is to enable Auto-Membership and test with either having Organization Signup enabled ( on the same page, after enabling Auto-Membership, you can select " Enable Signup" under Organization Signup) or disabled. I do recommend his following Knowledge Base article and watching the video attached regarding Organization Sign up.
Merry Christmas 
Gerald