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Official response from Spotify as of 4 Feb 2019:
Apologies, but the playlist radio context menu has been removed with our current update.
Spotify Customer Support
So there you have it.
Please vote on the right -->
This is an intentional change by Spotify, so we need to make it heard that we want this feature back. Read on below.
Let spotify know you want this feature back: go to https://support.spotify.com/us/contact-spotify-support/ > Other > I still need help and write to them
This is a request that Spotify undo their change over the last two weeks to remove the context-menu Playlist radio option from all their platforms.
It is NOT sufficient to link to "Where is Radio?" https://support.spotify.com/using_spotify/system_settings/why-am-i-seeing-different-features-than-my... - this is not a communications issue, or a learning curve issue.
We are asking very precisely that Spotify undo this change. Return the "Playlist radio" contextual option in all platforms. We further ask that it return for all objects, i.e all playlists (created by the user or other users), albums, artists etc. Basically: make it like it used to be.
The most obvious example is that the create radio playlist option is missing from the right-click context menu on Macos and Windows. But all platforms now make it more difficult to create radio playlists.
It disappeared for me on my Mac last week, Windows PC on Monday and Android yesterday.
Once you get the update, to create a radio station you now need to go to Radio > Create Radio Station, this will then open a sidebar which you can type the name of your playlist into using your keyboard which will then give you the option to create a radio station. So the feature is effectively buried.
I contacted support and they said:
At Spotify, we’re often testing and launching improvements and new features. When we’re testing, you may see something on the app your friend doesn’t, or get a new feature for only a temporary period. Let us know what you think over at our Community.
Seems like they are following an industry trend of removing features from their service to "reduce complexity". Looks like design bunker thinking to me.
I hope the option returns.
If it doesn't return, vote with your wallet. Youtube Music has playlist radio on everything and 1 month free trial: https://www.youtube.com/premium
Updated on 2019-03-20
The Radio feature should appear on the context menu of most albums, tracks and playlists. To access the menu, just right click on desktop or click the three dots on mobile. There you'll see the option to select 'Go to Song/Album/Playlist Radio'.
As a heads up, there's been some recent changes to the way Radio works. You can check out the details of this here. It looks like the more recent comments on this thread are about these changes to Radio. There's a new idea about this specifically which you can add your vote to here.