Why am I getting "Invalid algorithm specified" exception

There is no issue with .NET code or the CSP code you provided.

Your problem is that CSP just doesn’t support SHA 256. You can get further information here

For dot net framework 4.7.0 or higher is not taking the sha1 so configure the below in application start. it's worked fine for me.

 AppContext.SetSwitch("Switch.System.Security.Cryptography.Xml.UseInsecureHashAlgorithms", true);
 AppContext.SetSwitch("Switch.System.Security.Cryptography.Pkcs.UseInsecureHashAlgorithms", true);