The current functional level of the local domain controller as indicated by its NTDS Settings object is incompatible with ...

The current functional level of the local domain controller as indicated by its NTDS Settings object is incompatible with the operating system because the functional level is set higher than the functional level supported by this operating system. 
 
Functional level based on NTDS Settings object:
%1 
Functional level supported by the operating system:
%2