Hello @Miley123, I tried your scenario with edit copy/duplicate authorization and got the same error.
You can't share the workspace project with others when you have edit copy/duplicate authorization, you can only do that when you are the owner or have edit rights to the workspace project. Ask your co-worker to save the copy of the report, then she will become the owner of the copy. So, she can be able to share it to the other audience. Thanks!