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Permission Set 'Temporary Account Edit' is not referenced in the flow 'Accounts Temp Access'. Check the instructions.
I am having the below issue.

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Greetings to you!
Permission set Temporary Account Edit: activated for the session...
Also permission set API name: Temporary_Account_Edit
Flow: Accounts Temp Access
Unique Name: Accounts_Temp_Access
Activation flow action: Activate Session-Based Permission Set
Input Permission Set Name set to variable TemporaryAccountEdit
Default Value: Temporary_Account_Edit
This error is caused due to using a "variable" instead of a "constant" in the flow. Even though your flow works, the challenge test is looking for a "constant". Change it, and you will be able to pass the challenge.
I hope it helps you.
Kindly let me know if it helps you and close your query by marking it as solved so that it can help others in the future. It will help to keep this community clean.
Thanks and Regards,
Khan Anas
I have followed the above steps, still, have the same issue.
I think the problem is that the Clow Flow Designer is not available anymore and is replaced by the Flow Builder now.
You cannot choose between variable or constant here, only the name can be entered.
I think this trailhead needs an update before it can be completed :(
Kind regards Esther
Regarding this issue i got a solution may be you can try this out,
I have added a 'Get Record' node and in this node I am getting the Permission Set Value and then passing it to 'Activate Session-Based Permission Set action'.
See below screenshots. Hope this helps.
You can refer the below Link for the same, trail head information have to be updated i believe.
https://help.salesforce.com/articleView?id=perm_sets_session_activate_flow.htm
Please Mark it as Best Answer if it helps.