Wow @Matt_g it appears Webflow has changed this feature since you started working on your site.
I even dragged an HTML embed out of one of your link blocks from the Navigator, then attempted to drag it back into the link block and it would not let me. I got the same error you are describing. I also tried dragging a brand new HTML embed into a brand new link block and received the same error.
All that being said, what did work for me was to take an existing link block and copy it then paste it, then edit it. This will allow you to continue working on your site whilst working around this new restriction from Webflow.