"Could not create sprite" exception - copying and manipulating texture from SpriteAtlas

I have a bunch of 8bit car sprites, with black outlines and white paint. I am using the method called CopyTexture2D() from post #8 in this thread to change the color of the car to a random RGB value, generating a bunch of traffic.

That solution works brilliantly when I have a folder full of individual sprites. However, when pulling a sprite from a SpriteAtlas (and also when loading sprites directly from a multiple sprite sheet into Sprite[]) it errors. The following code:

 Sprite.Create(carTexture, carSprite.rect, new Vector2(0f, 1f));

returns the following error:

 ArgumentException: Could not create sprite (0.000000, 200.000000, 101.000000, 50.000000) from a 101x50 texture.

0, 200 is the position of the selected sprite within the sprite atlas. I can avoid the error by changing it to -

 Sprite.Create(carTexture, new Rect(0f, 0f, 101f, 50f), new Vector2(0f, 1f));

• but that pulls the sprite from position 0, 0 in the sprite atlas, rather than the sprite I originally loaded.

The full code (related to this problem, anyway) is-

 public Transform GenerateCar(Vector2 position, Quaternion rotation)
 {
     string spriteName = "8bit-Car-Full-Sprite-Sheet_" + carNo.ToString();
     carNo++;
     if (carNo > 49)
     {
         carNo = 0;
     }
     Sprite carSprite = sa.GetSprite(spriteName);
     Transform car = Instantiate(prefab, position, rotation);
     
     // here is the call (CopyTexture2D() from the referenced post, here renamed to PaintCar())
     Texture2D carTexture = PaintCar(carSprite.texture);
     
     // here is the error
     Sprite sprite = Sprite.Create(carTexture, carSprite.rect, new Vector2(0f, 1f));
     
     car.GetComponent<SpriteRenderer>().sprite = sprite;
     return car;
 }

-and-

 private Texture2D PaintCar(Texture2D copy)
 {
     // pick a random RGB color
     byte colorR = (byte)UnityEngine.Random.Range(0, 255);
     byte colorG = (byte)UnityEngine.Random.Range(0, 255);
     byte colorB = (byte)UnityEngine.Random.Range(0, 255);
     Texture2D texture = new Texture2D(101, 50, TextureFormat.ARGB32, false);
     texture.filterMode = FilterMode.Point;
     texture.wrapMode = TextureWrapMode.Clamp;
     // loop through each row of pixels
     int y = 0;
     while (y < texture.height)
     {
         // loop through each pixel in the row
         int x = 0;
         while (x < texture.width)
         {
             if (copy.GetPixel(x, y) == Color.white )
             {
                 texture.SetPixel(x, y, new Color32(colorR, colorG, colorB, 255));
             }
             else
             {
                 texture.SetPixel(x, y, copy.GetPixel(x, y));
             }
             x++;
         }
         y++;
     }
     texture.Apply();
     return texture;
 }

Hopefully, that's enough info to help get to the bottom of this. Let me know if I am missing something you need. Thanks in advance!