I handed my team over to another player and now I can't add players. Why?

Yes, that is why. Passing team ownership (“Transfer team ownership”) makes you a regular player of that team. Only the owner and captains can invite players and edit the team’s season roster in a league.

Ask the new owner to make you a captain (“Assign captain”); a team can have up to 3 captains. If you are the league Creator or a Manager, you can still edit any team’s season roster from the league (Participants, the team).

This is expected behaviour, not a bug.