You cannot set up a hierarchy for class type &

What causes this issue?

You cannot set up a <DS:GLOS.class_hierarchy>hierarchy</> for class
type &V1&.

System Response

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

How to fix this error?

In the IMG for classification, you can define for each class type
whether or not a class hierarchy can be set up for classes of this class
type.
If required, have the settings in the IMG changed for this class type.

Error message extract from SAP system. Copyright SAP SE.