I'm trying to split audio by
--> right click video clip
--> split audio
--> Error message: No empty space to put clip audio

What is empty space referring to? There's free disk space on file system.

It seems you have no audio tracks available. “Split audio“ separates the audio from the video and put the audio on a separate audio track.

Solution: right click on a video track -> insert track -> “under” video, tick “Audio Track”, change track name to “Audio 1” -> tick “OK”.
Now with “split audio” should work