I tried doing this, but the only way it works is to swap out an existing team. I assume this is due to the scheduling effects. If not, correct me/

DDSCB2022 will have 358 teams.

i know, but i meant is there a way to make a mod on DDSCB21 for a 358th team? I am trying to add a D2 team in the mod, but it only works if I swap out an existing team and put the new team in their place.

No, but you could create a Promotion/Relegation association and edit one of the 5 Independent teams as your D2 team. If the team does well enough to be promoted and you don't want it to be part of a D1 conference, you could exchange it with another Independent on May 1 the next year. OR...you could edit all 5 independent teams into D2 teams. In promotion/relegation, the one independent team with the best record gets promoted up to Conference V...and the team in Conference V with the worst record gets relegated to Independent, or in your case, D2 status.

Yes DDSCB21 is locked to 357 teams. You would need to swap out with another team.