There's a different troubleshooting steps for connecting the domain to your Google Sites website when you used a Google Workspace account, that's why the Simple site option is not showing on the Website tab. We usually follow the steps on this article for connecting the domain to Google Sites when using a Google Workspace account on creating the website.
The Simple site option on the Website tab will show up though if you will access your Google Domains page or use a regular email or the one that ends with @gmail.com for creating the website in Google Sites.
If you want to see the Simple site option on the Website tab, I provided steps you can follow for adding your regular Gmail account on the domain so you can use it to create your website.
Sign in to Google Domains.
Click the domain
On the left menu, go to Registration settings.
Scroll down to Domain permissions.
Add your regular Gmail account that ends with @gmail.com.
Sign in to Google Domains using your regular Gmail account.
Click your domain
On the left menu, go to Website.
Click Build website.
Click Continue for Simple site.
Select Start new site for you to create a website.