Yes, it seems that you are unable to create a v1 Function app in Azure Portal, however, you can still get there with a couple of extra steps.

First, create your app choosing .NET for the runtime stack and 3.1 as the version.

Once the app has been created, open the app configuration, switch to the Function runtime settings tab and change the Runtime version to ~1

However, as Jon suggests, v1 apps are likely going to become harder and harder to create so my advice would be to migrate as soon as possible.

Yes, looking at the documentation for Azure Functions runtime versions, it looks like v1 was the only one to support .NET Framework (aka the Windows desktop framework) rather than .NET Core / .NET.

That's presumably why the v1 description includes:

Recommended only for C# apps that must use .NET Framework and only supports development in the Azure portal, Azure Stack Hub portal, or locally on Windows computers.

So if your app must use .NET Framework as opposed to .NET 5/6 or .NET Core, you'll need to stick to v1. It's not clear where your deployment screenshot comes from, but it sounds like you can create a v3 app in the portal and then downgrade it to v1 before adding any functions.

Ultimately though, I would expect keeping deploying on v1 to become trickier and trickier. Eventually I suspect you'll have to move off it (although I don't have any idea when that would be) so it's worth coming up with a plan for that sooner rather than later.