Symptoms

we have a K2 Workflow that is designed to create a sharepoint document set based on a sharepoint template. In our Dev environment the workflow works correctly creating the document set. In our QA and Prod environments the workflow runs but creates a folder instead of a document set.

we have compared the sharepoint environments and they seem to be the same. Attached are screenshots of the workflow.
 

Diagnoses

The issue was caused by the name of the Content Type is different. In Dev the name of the Content Type is "Insurance Document Set". In Stage, the name of the Content Type is "Insurance Doc Set".
 

Resolution

The issue can be resolved by either modify the name of the Content Type to match between environments or modify the workflow to use different SmartObject name.