The problem is entirely with newgens, and I can confirm that it is currently impossible to sign any EU newgen as an EU team, at least in the first year when they appear. In previous FMs, the top wonderkids in big clubs usually refuse to move, which makes sense because they are already at a big club, and the other crappy newgens at small clubs with one or two star PA would always jump at the chance if you tried to sign them as a big club. But even they turn you down now. I'm not sure why SI decided to go to such extremes just to prevent poaching this year. If Garnacho and Hannibal were newgens in this game and held european citizenship, you would not be able to sign them because something in the code prevents that. Examples shown in this thread were probably for 16 year olds that already exist in the game, those have no problem and are not affected.
I saw in the bug tracker that SI have acknowledged that there have been some changes this year regarding the newgens, which is fine. But I would like to know if it is intentional for every single newgen to be locked from transferring when they first show up, and for how long.