Heroes 5.5 (RC14 Beta 6) - bug with the elemental dwelling that cannot be converted into its native dwelling. Although the conversion option is offered, the money is deducted, but the conversion does not occur.
Most likely, the total limit of dwellings of the corresponding level for your faction has been exceeded.
You can change the limit manually (requires starting a new game); details can be found at the following link:
There, you can also change the governor's experience gain and the ability to rebuild buildings. You can only change the numerical values within the specified ranges; changing the text will cause errors.