Hi!
It seems like the latest version of Worldedit (worldedit-forge-mc1.16.3-7.2.0-dist.jar) does not work correctly with Forge 1.16.4 (forge-1.16.4-35.0.15), at least not in multiplayer server. It works in singleplayer but Minecraft displays it as "Incompatible" and "made for an older version of Minecraft". I have also tried Forge 1.16.3 but with the same results. Maybe I'm doing something wrong but I can't get it to work on my Forge 1.16.4 server.

Regards Nexus

Can you provide your latest.log from the server?

Sure!
[20:07:13] [main/INFO]: Environment: authHost='https://authserver.mojang.com', accountsHost='https://api.mojang.com', sessionHost='https://sessionserver.mojang.com', servicesHost='https://api.minecraftservices.com', name='PROD'
[20:07:13] [main/WARN]: Ambiguity between arguments [teleport, destination] and [teleport, targets] with inputs: [Player, 0123, @e, dd12be42-52a9-4a91-a8a1-11c01849e498]
[20:07:13] [main/WARN]: Ambiguity between arguments [teleport, location] and [teleport, destination] with inputs: [0.1 -0.5 .9, 0 0 0]
[20:07:13] [main/WARN]: Ambiguity between arguments [teleport, location] and [teleport, targets] with inputs: [0.1 -0.5 .9, 0 0 0]
[20:07:13] [main/WARN]: Ambiguity between arguments [teleport, targets] and [teleport, destination] with inputs: [Player, 0123, dd12be42-52a9-4a91-a8a1-11c01849e498]
[20:07:13] [main/WARN]: Ambiguity between arguments [teleport, targets, location] and [teleport, targets, destination] with inputs: [0.1 -0.5 .9, 0 0 0]
[20:07:13] [main/INFO]: Reloading ResourceManager: Default
[20:07:14] [Worker-Main-6/INFO]: Loaded 7 recipes
[20:07:14] [Worker-Main-6/INFO]: Loaded 927 advancements
[20:07:16] [Server thread/INFO]: Starting minecraft server version 1.16.4
[20:07:16] [Server thread/INFO]: Loading properties
[20:07:16] [Server thread/INFO]: Default game type: SURVIVAL
[20:07:16] [Server thread/INFO]: Generating keypair
[20:07:17] [Server thread/INFO]: Starting Minecraft server on *:25565
[20:07:17] [Server thread/INFO]: Using default channel type
[20:07:22] [Server thread/INFO]: Preparing level "world"
[20:07:23] [Server thread/INFO]: Preparing start region for dimension minecraft:overworld
[20:07:24] [Server thread/INFO]: Preparing spawn area: 0%
[20:07:39] [Worker-Main-7/INFO]: Preparing spawn area: 83%
[20:07:40] [Worker-Main-7/INFO]: Preparing spawn area: 83%
[20:07:40] [Worker-Main-7/INFO]: Preparing spawn area: 83%
[20:07:40] [Worker-Main-4/INFO]: Preparing spawn area: 83%
[20:07:40] [Server thread/INFO]: Preparing spawn area: 83%
[20:07:40] [Server thread/INFO]: Preparing spawn area: 83%
[20:07:40] [Worker-Main-8/INFO]: Preparing spawn area: 83%
[20:07:40] [Worker-Main-4/INFO]: Preparing spawn area: 83%
[20:07:40] [Server thread/INFO]: Preparing spawn area: 83%
[20:07:40] [Worker-Main-7/INFO]: Preparing spawn area: 83%
[20:07:40] [Server thread/INFO]: Preparing spawn area: 83%
[20:07:40] [Worker-Main-7/INFO]: Preparing spawn area: 83%
[20:07:40] [Server thread/INFO]: Preparing spawn area: 83%
[20:07:40] [Worker-Main-7/INFO]: Preparing spawn area: 83%
[20:07:40] [Server thread/INFO]: Preparing spawn area: 83%
[20:07:40] [Worker-Main-7/INFO]: Preparing spawn area: 83%
[20:07:40] [Worker-Main-7/INFO]: Preparing spawn area: 83%
[20:07:40] [Server thread/INFO]: Preparing spawn area: 83%
[20:07:40] [Worker-Main-7/INFO]: Preparing spawn area: 83%
[20:07:40] [Server thread/INFO]: Preparing spawn area: 83%
[20:07:40] [Worker-Main-7/INFO]: Preparing spawn area: 83%
[20:07:40] [Server thread/INFO]: Preparing spawn area: 83%
[20:07:40] [Server thread/INFO]: Preparing spawn area: 86%
[20:07:41] [Worker-Main-7/INFO]: Preparing spawn area: 87%
[20:07:41] [Worker-Main-7/INFO]: Preparing spawn area: 87%
[20:07:42] [Worker-Main-8/INFO]: Preparing spawn area: 87%
[20:07:42] [Worker-Main-7/INFO]: Preparing spawn area: 87%
[20:07:43] [Worker-Main-4/INFO]: Preparing spawn area: 87%
[20:07:43] [Worker-Main-7/INFO]: Preparing spawn area: 87%
[20:07:44] [Worker-Main-7/INFO]: Preparing spawn area: 87%
[20:07:44] [Worker-Main-4/INFO]: Preparing spawn area: 88%
[20:07:45] [Worker-Main-8/INFO]: Preparing spawn area: 91%
[20:07:45] [Server thread/INFO]: Preparing spawn area: 97%
[20:07:46] [Server thread/INFO]: Time elapsed: 22984 ms
[20:07:46] [Server thread/INFO]: Done (23.121s)! For help, type "help"
[20:07:56] [Server thread/WARN]: Can't keep up! Is the server overloaded? Running 3948ms or 78 ticks behind
[20:08:21] [User Authenticator #1/INFO]: UUID of player ZpenniS is 4859a927-b4fc-4ef2-8828-e52f2e0c5780
[20:08:21] [Server thread/INFO]: ZpenniS[/127.0.0.1:55735] logged in with entity id 210 at (-92.4773084157646, 63.0, 244.27162866229813)
[20:08:21] [Server thread/INFO]: ZpenniS joined the game
[20:09:08] [Server thread/INFO]: ZpenniS lost connection: Disconnected
[20:09:08] [Server thread/INFO]: ZpenniS left the game
[20:13:38] [User Authenticator #2/INFO]: UUID of player ZpenniS is 4859a927-b4fc-4ef2-8828-e52f2e0c5780
[20:13:38] [Server thread/INFO]: ZpenniS[/127.0.0.1:56068] logged in with entity id 264 at (-92.83011390509324, 63.0, 247.10423542393778)
[20:13:38] [Server thread/INFO]: ZpenniS joined the game
[20:14:04] [Server thread/INFO]: ZpenniS lost connection: Disconnected
[20:14:04] [Server thread/INFO]: ZpenniS left the game
[20:20:26] [Server thread/INFO]: Stopping the server
[20:20:26] [Server thread/INFO]: Stopping server
[20:20:26] [Server thread/INFO]: Saving players
[20:20:26] [Server thread/INFO]: Saving worlds
[20:20:26] [Server thread/INFO]: Saving chunks for level 'ServerLevel[world]'/minecraft:overworld
[20:20:26] [Server thread/INFO]: ThreadedAnvilChunkStorage (world): All chunks are saved
[20:20:26] [Server thread/INFO]: Saving chunks for level 'ServerLevel[world]'/minecraft:the_nether
[20:20:26] [Server thread/INFO]: ThreadedAnvilChunkStorage (DIM-1): All chunks are saved
[20:20:26] [Server thread/INFO]: Saving chunks for level 'ServerLevel[world]'/minecraft:the_end
[20:20:26] [Server thread/INFO]: ThreadedAnvilChunkStorage (DIM1): All chunks are saved
[20:20:26] [Server thread/INFO]: ThreadedAnvilChunkStorage (world): All chunks are saved
[20:20:26] [Server thread/INFO]: ThreadedAnvilChunkStorage (DIM-1): All chunks are saved
[20:20:26] [Server thread/INFO]: ThreadedAnvilChunkStorage (DIM1): All chunks are saved

That's a vanilla server, make sure you start the correct JAR, it's called "forge", not "minecraft_server". If you need further support please come to the Discord server.