I just shortly tested it with 2 Smack-based clients (not Spark) and could not reproduce this issue. I've also checked the XMPP traffic. No error at all.
I also checked with another client (Swift) and I could create instant rooms and join them with 2 users. (But didn't send an invitation on A to B).
Then I had a look at your invites.xml and saw only another MUC related error:
<iq xmlns="" type="error" id="purplee1ec933d" from="adium_created_room@conference.jabber.server" to="adium@jabber.server/MacBook">
<query xmlns="http://jabber.org/protocol/disco#info" node="http://jabber.org/protocol/muc#traffic"/>
<error code="404" type="cancel">
<item-not-found xmlns="urn:ietf:params:xml:ns:xmpp-stanzas"/>
</error>
</iq>
but I think it's unrelated to joining rooms.
This is not the same as the recipient-unavailable in the presence stanza.
So, what's the real error?