Here's my 30-libinput.conf for reference.

Section "InputClass" Identifier "touchpad" Driver "libinput" MatchIsTouchpad "on" Option "Tapping" "on" Option "DisableWhileTyping" "on" Option "TappingDrag" "off" Option "NaturalScrolling" "on" Option "TappingDragLock" "off" EndSection

The only difference I can see is the order of options and the fact that you have capitalized the word Touchpad in the Identifier bit. It could be something as silly as that. I've had linux refuse to boot with a misconfigured libinput configuration file before I arrived at this one. :)

Note: I just looked at the system provided 40-libinput.conf and the identifiers are all lowercase, so that could be it.