Hi teams!
This is a workaround that reportedly worked for some customers.

You may want to validate at your UAT instances‚ maybe it's helpful to you too. You may add this to the announcement banner:

<!-- COMPANY-NAME custom announcement banner CSS to prevent Status creation from Agile Boards (Workaround to JSWSERVER-15276) -->
<style>
#ghx-dialog-create-status form, #ghx-dialog-create-status button {
  display: none;
}

#ghx-dialog-create-status h1::after {
  content: '(disabled by Jira Admins)';
}

#ghx-dialog-add-column form, #ghx-dialog-add-column button {
  display: none;
}

#ghx-dialog-add-column h1::after {
  content: '(disabled by Jira Admins)';
}
</style>
<!-- End of workaround to JSWSERVER-15276 -->

Please change COMPANY-NAME by your company and keep the comments, as a best-practice.

Also please review How to customize Jira with JavaScript and CSS to understand the caveats and disclaimers on such customizations that are unsupported and provided always as-is to be applied at the Jira Admins' own discretion.
 
Cheers

This causes us constant headaches. The ability to turn off or at least limit this functionality would save us an incredible amount of time (not to mention headaches!)

PLEASE. I want to allow the simplified workflow, but only allow users to select from the existing statuses. 

This is also causing an issue for our company, we need the option to be able to stop board admins from creating a status on simplified workflows as the workaround to move all workflows over will be a large project

We have been asking for this for nearly 2 yrs now. We have an EA with Atlassian and yet we have no traction on this. It's causing a lot of issues.   Why can't we get traction on this?  

The workaround that we use in our setup is to always have a dummy project created next to the original one by shared project config and by that the simplified option to add statuses is blocked. We can follow this principle as we try to just use shared Jira configurations as far as possible. 

This feature is causing problems now that users can easily create statuses for their projects. I find myself copying workflows to remove unused and duplicated statuses.

It is unacceptable that Jira administrators do not have control over it, as it creates more work for us to manage. We need a solution for this.

Any updates? 

Any updates?

I wasn't able to find a version of this for Cloud, so I created and linked https://jira.atlassian.com/browse/JRACLOUD-73833.