God knew the Fall would happen, yet He created humanity to fulfill His eternal plan of love, grace, and redemption through Christ. The Fall was not a surprise, but part of God's sovereign purpose to reveal His glory in rescuing and restoring what was lost.
This question includes two aspects: 1) God's foreknowledge of Satan's rebellion and Adam and Eve's sin, and 2) Why He created them knowing they would sin. God knew Satan would rebel against Him and then successfully tempt Adam and Eve. God knows all things. So why did He create humans with the ability to sin if He knew that Satan would successfully tempt Adam and Eve? We see in 2 Timothy 1:9 that before God created anything He made a plan to express the fullness of His love and grace to His image-bearers, us (Genesis 1:27). God began to work out his plan to redeem humans from sin before he began his works of creation. God's call to redemption applies to everyone, from Adam and Eve, to you and me.
God created Adam and Eve with the ability to sin to bring Himself maximum glory. In ways beyond our complete comprehension, God's glory is best displayed in the way He has chosen to create humanity, including allowing for our sinful nature. Part of this display of glory will be seen at the end of time when the curse is ended, Satan is defeated, and sin is removed (Revelation 20-22).
As part of God's sovereign creation, we have the ability to make choices, including right and wrong. While it may be hard to comprehend how God's sovereign plan and our choices work together, Scripture reveals both. God's perfect plan continues to move forward despite human sin. Just as God made plans for us (Ephesians 2:10), parents who are expecting a baby lovingly make plans before the baby is born. At the same time they know that rebellion can occur as the baby grows into an adult. But that doesn't change their plan to love and care for their child.
God not only created us with the capacity to sin, but also with the capacity to receive forgiveness through His grace. From the beginning, God planned to offer redemption through Jesus Christ, knowing that humanity would fall and need restoration (Ephesians 1:4–5; 2 Timothy 1:9). This ability to be forgiven reveals the depth of God's love and mercy. He did not leave us in our brokenness but made a way for us to be reconciled to Him through faith in His Son (Romans 5:8; 1 John 1:9). In this, God's glory is not only seen in His justice, but also in His compassion and the power of His redemptive plan.