Can you please explain what is not working i.e. contact not created or updated?
In case you trying to test the API for default contact which comes with CRM subscription? Because the email for the default contact is “janesampleton@gmail.com” and not the “jamessampleton@gmail.com”, you might see a new contact getting created which is expected behavior since the emails are not unque.
Thanks for detailed description and I could reproduce the issue following the steps provided.
The issue is occurring if the same contact is there in Recycle Bin however, this does not make sense.
The validation error is occurring only when we re-run the upsert call and creates the duplicate contact in first run.
It looks like a defect to me. Could you please raise it to support.
As a workaround, please delete the contact permanently from Recycle bin folder.