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Check out the v.254 - Midnight Carnival - Ludibrium Patch Notes
here!
I tried to create a new character, which resulted in being asked to delete an existing character or to buy an expansion. I deleted over 5 characters, without receiving and extra spot to create a character with.
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If you had more characters copied over, you can use them all, but if you delete one you don't get its slot back.
You'll have to go down to 7 characters or less if you want to create a new one.