By default, only Global Administrators and Identity Governance Administrators can create catalogs in Azure AD Entitlement Management. To delegate this ability to other users such as User1, you must modify the Entitlement Management Settings in the Identity Governance blade.
Microsoft documentation and the SC-300 exam guide note:
"In the Entitlement management settings, you can configure who can create new catalogs and manage catalog ownership." Therefore, granting User1 the permission to create catalogs and add resources requires configuring entitle ment management settings-not changing role assignments in the Roles and administrators blade.