vCenter UI > VM > VM Storage Policies Compliance" tab
This is a known cosmetic UI issue. The "red error icon" status under the VM Storage policy compliance status are reported when there are no policy assignment is recorded in the SPBM service database.
No action required as this is an expected behaviour and we may not be able to edit the policy as this is system managed.
This is a cosmetic issue and does not impact the functionality, performance, or data integrity of the virtual machines. The red compliance warning can be safely ignored