I can confirm that this is not a bug, but a change to project creation on Feb 27th 2017. The reason we removed the checkbox was that to many users the option was not obvious, and so we decided to separate the concerns.
Rather than having more Spaces created but remaining unused and empty, we thought it would be better to make the Space creation more deliberate.
After creating a JIRA Project you can still achieve the linking by
Also, back in the JIRA project you can add a Project shortcut and link back to your Confluence space.
At this point I would contact the Cloud team so they can determine why that is still part of your instance so they can make the necessary changes.
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