Workflow does not run when an item is created, if the item was created via the "Create List Item" action

When an item is created via the Create List Item action, the workflow will not be triggered even when it is configured to start on item creation. 

Use the 'Office 365 Create List Item or Document Set' action instead of 'Create List Item' action.

This is by design and can be replicated via SharePoint Designer. SharePoint Online prevents workflows from recursively starting additional workflows. However, using the 'Office 365 Create List Item or Document Set' allows an item to be created under a set of credentials, allowing recursive workflows to be started as expected.