"Error: The operation has timed out" received when installing the policy
Having investigated the errors, internally, we understand that this error may have been triggered because the appliance may be undersized, for the number of devices added. So we can verify this, kindly share the "manages devices" page on the MC. See the snippet below, for guidance.
Please match your resource deployment with the guidance provided in the Tech. doc. with the URL below. Please ensure your deployment follows the recommended sizing, for the number of managed devices on the MC.
For the "Error: The operation has timed out" received when installing the policy, we recommend removing the affected rule and having it installed from a new/different policy layer, and then push the policy again, to resolve the issue, where there isn't license expiration.
Now, with an expired base license on the target ProxySG appliance, policy installation will not happen, since the appliance wouldn't be usable. In the license-expired state, You can still perform configuration tasks through the CLI, SSH console, serial console, or Telnet connection. Although a component is disabled, feature configurations are not altered. Also, policy restrictions remain independent of component availability. See the reference docs. with the URLs below, for more guidance.
We strongly recommend having the license issue resolved, before creating/installing policy rules.