Object type &1 is not allowed

What causes this issue?

You have entered an object type that is not allowed. Either the object
type you have entered does not exist, or it is an 'external' object
type. You can only use 'internal' object types at this point.

System Response

The system does not accept the entry.

How to fix this error?

Select an 'internal' object type. To display a list of available
'internal' object types, use the input help function.

Procedure for System Administrators

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

Error message extract from SAP system. Copyright SAP SE.