Sorry to hear you’ve been encountering trouble with set up. Indeed the plugin does allow you to select an existing Tag Manager container if available, or offers to create one for you. This is normal and expected.
Regarding the error whereby you’re asked to perform a plugin reset, this isn’t normal when connecting Tag Manager within Site Kit. If you’d like to share the message you encountered I’d be happy to investigate this for you, and at what stage you were at in setup. By that I mean were you successfully able to complete Tag Manager connection, with the error appearing when visiting the Site Kit dashboard, or elsewhere.
Let me know if you have any questions with the above. We do take all such reports seriously, so hopefully we can determine what happened to you should you wish to give the plugin another try or share further details. Thank you.