Hi Ermin,
I have reproed the issue in another tenant. When I assigned "Approvers" or "CC" in modified approval workflow, "The form cannot be submitted because of an error" occurred.
And I resolved the issue by deleting xsi:nil="true" in "Approvers" and "CC" fields from .xoml.wconfig.xml file. From your post, I found you have not removed the xsi:nil="true" from <d:Assignee xsi:nil="true"/> under "Approvers" field. That is why "Approvers" people picker doesn't work.
Here could you please take your time to remove xsi:nil="true" from <d:Assignee xsi:nil="true"/> as the following snapshot shows? It should be able to resolve your issue.
If there is any questions, please feel free to let us know and we are happy to help.