Why Android Studio Koala still not supports AGP 8.5
According to the official doc, the Android Studio Koala should already support AGP 8.5.
TLDR; Do a clean android studio installation, do not extract it in same folder of previous version.
Today I faced this issue, when I upgraded Android studio from Iguana. I downloaded and extracted the Koala zip in the same folder where Iguana was. The android studio indeed gave me warning that multiple markers are present in file system and do a clean android studio install.
In my case the error was "latest AGP supported version 8.3.0" which was supported by Iguana. In your case the the error "latest AGP supported version is 8.4" because thats what was supported by Jelly Fish. So I am assuming you upgraded from Jelly Fish.
Doing installation in fresh directory fixed the error for me. I hope it solves your problem as well.
android studio and their supported AGP https://developer.android.com/build/releases/gradle-plugin
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