Software component &1 cannot be set to "modifiable"

What causes this issue?

You cannot set the software component &V1& to <LS>Modifiable</>.
The reasons are as follows:
SAP software components cannot be completely modifiable in a customer
system.
Application software components cannot be completely modifiable in an
internal SAP Basis system.
Basis software components cannot be completely modifiable in an
internal SAP application system.

System Response

The software component &V1& was set to <LS>Restricted modifiability</>.

How to fix this error?

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

Procedure for System Administrators

Error message extract from SAP system. Copyright SAP SE.