Android Studio 3.0 Manifest Error: unknown element found

You have a misplaced tag. The new AAPT (AAPT2) now throws an error on this.

From the docs in here: https://developer.android.com/studio/build/gradle-plugin-3-0-0-migration.html

Behavior changes when using AAPT2


To improve incremental resource processing, Android plugin 3.0.0 enables AAPT2 by default. Although AAPT2 should immediately work with older projects, this section describes some behavior changes that you should be aware of.

Element hierarchies in the Android manifest

In previous versions of AAPT, elements nested in incorrect nodes in the Android manifest are either ignored or result in a warning. For example, consider the following sample:

<manifest xmlns:android="http://schemas.android.com/apk/res/android"
   package="com.example.myname.myapplication">
   <application
       ...
       <activity android:name=".MainActivity">
           <intent-filter>
               <action android:name="android.intent.action.MAIN" />
               <category android:name="android.intent.category.LAUNCHER" />
           </intent-filter>
           <action android:name="android.intent.action.CUSTOM" />
       </activity>
   </application>
</manifest>

Previous versions of AAPT would simply ignore the misplaced tag. However, with AAPT2, you get the following error:

AndroidManifest.xml:15: error: unknown element <action> found.

To resolve the issue, make sure your manifest elements are nested correctly. For more information, read Manifest file structure.

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