If I try to create a new ID (after already being signed in with Amber), it says "Identity already exists" for every nickname I enter.

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This seems to be a bug, and we’ll fix it next week. Thanks for the feedback.

When you create a new ID, do you choose Create ID from Seed Phrase?

No I'm using Amber option

We found the cause of the bug and will fix it.

When you want to log into Keychat with your second ID on Amber, you need to first select that ID in Amber, and then log into Keychat. Try it — it should solve your problem.