Most likely this is a Free Edition storage limitation rather than a bug, and your Postgres-side setup sounds correct. Lakebase CDF writes its destination as a Unity Catalog managed Delta table, and the Lakebase CDF docs list catalogs backed by default storage as unsupported destinations. Free Edition workspaces run on default storage (custom workspace storage locations are unsupported), so the destination table creation cannot complete there, which matches what you see: setup goes through, but wal2delta.tables never gets a destination.

To confirm and move forward:

1. Check the destination catalog's storage location in Catalog Explorer (catalog > Details). If the path contains unitystorage, it is default storage, and that catalog cannot be a CDF destination today.

2. While you are in there, verify the other requirements: the source table lives in the databricks_postgres database, and your identity has USE CATALOG, USE SCHEMA, and CREATE TABLE on the destination catalog and schema.

3. To see CDF working end to end, run the same setup in a workspace whose destination catalog is backed by your own cloud storage (an external-location-backed catalog on a standard or trial workspace). Everything you did on the Postgres side (REPLICA IDENTITY FULL, rows present before enabling) carries over as is.