Found a workaround on StackExchange. Apparently you just have to set the hostname on the machine.
$ hostnamectl --pretty set-hostname <machine hostname> And after that it works. Here is the link to the workaround and the the bug seems to have been already reported to upstream gnome. https://unix.stackexchange.com/questions/339087/unable-to-create-hotspot-using-network-manager-of-gnome-arch-linux
