Cannot delete database after upgrade to MySQL 8

[AudiAddict]

Unable to remove the database databasename : Index column size too large. The maximum column size is 767 bytes.

I'm getting this error when trying to delete a database in Directadmin GUI.
This is happening after upgrade from MySQL 5.7 -> 8.0.

Any idea's on how to delete this database manualy?

Making a new database works - and deleting it too under the same user. When going via Shell in mysql with the root user it does not allow me to drop this specific database either.

Also in preperation of Mysql 8 update I've set:

mysql_use_new_user_methods=1

and still getting errors when making new databases:

Unable to add user AudiAddict. You are not allowed to create a user with GRANT
Your database has been setup. Use the following values:

 

[AudiAddict]

See attached image: I cannot delete the database via shell or phpmyadmin. Creating a new one works (except for the grant error above).

Any idea's on how to solve this? It also prevents me from replacing it with a backup.