I'm working through the Trailhead module on Account and Contact relationships (Learn CRM Essentials for Salesforce Classic > Accounts & Contacts > Understand Account and Contact Relationships https://trailhead.salesforce.com/trails/getting_started_crm_basics/modules/admin_intro_accounts_contacts/units/admin_intro_accounts_contacts_relationships)

It walks you through adding Related Contacts to the Account page, and then creating a related Contact through it. 


I run into an error when I create a new Contact off of that screen: "Error: You can't associate a private contact with an account.".


So, the steps are:
1: Account page
2: Click [Add Relationship] button in Related Contacts section
3: On the 'New Account Contact Relationship' click the Contact search icon
4: Click the [New] button
5: Enter the Contact info and click [Save]. The pop-up closes. (note: there is NOT an 'Account' field on this page.
6: Click [Save] button on the 'New Account Contact Relationship' page. The error is displayed. 

The only thing I've been able to do is exit these screens, go find the newly created Contact, edit it and add an Account, then go back and add the relationship.

How do I prevent this situation?

Thank you!