Utilization of hierarchy levels is not supported

What causes this issue?

<DS:GLOS.dimension>Dimension</> &V1& does not support the use of
<DS:GLOS.hierarchy_level>hierarchy levels</>.
You cannot specify the hierarchy level within the consolidation
functions nor in Reporting. Nor can you maintain any related
Customizing settings.

System Response

Error message

How to fix this error?

Change the settings in the master record for dimension &V1& to allow
the use of hierarchy levels.

Error message extract from SAP system. Copyright SAP SE.