I spent MONTHS trying to sort this and the fix is actually REALLY easy now I know!
This may not work for everyone so please don’t shoot me but my Karoq was just hanging for AGES! And then error.
All I did to fix it, after months of searching, was create an accounts at www.Skoda-connect.com
Click login and the next page gives you the ability to create an account. Follow the steps.
Once done you can connect BUT you will then get an error saying licence invalid.
It turns out you need to pay £44 per year for a licence here https://www.skoda-auto.com/connectivity/connect
Then as if by magic everything works!
If trying to tether to an iPhone hotspot you need to turn on Maximise Compatibility within your Personal Hotspot settings. Even then it didn’t find mine so I manually entered it and it works perfectly.
I hope this helps