You will need to manually select an upgraded minor version (i.e. the 3 in 1.3) in your dbt Cloud environment, so you don’t need to set require-dbt-version.
And even if you did, set the required version, it doesn’t work the way you described above – require-dbt-version is only enforced when dbt is invoked and the dbt Cloud environment configuration UI (as well as dbt Core itself, if you install from the CLI) doesn’t take it into account.
In short: It’s a way to do a last-minute check that your environment is correctly configured, but isn’t used to create the configuration itself.