Why is one of my devices getting nonComplianceReason: MANAGEMENT_MODE?

Question

I have a bunch of company owned devices with a few apps on them. They are all set up the same. What is the MANAGEMENT_MODE issue and is it tied to the policyEnforcementRules?

From Google's documentation on MANAGEMENT_MODE, it means "The management mode (profile owner, device owner, etc.) doesn't support the setting."

Device listing reporting:

    "nonComplianceDetails": [
      {
        "nonComplianceReason": "MANAGEMENT_MODE",
        "settingName": "applications"
      }
    ],
    "ownership": "COMPANY_OWNED",

Relevant policy section:

  "policyEnforcementRules": [{
    "blockAction": {
      "blockAfterDays": 15
    },
    "wipeAction": {
      "wipeAfterDays": 30,
      "preserveFrp": True
    },
    "settingName": "applications"
  }],

Why am I getting this non-compliance?

EDIT: Adding screenshot from one of the phones today and the cryptic message the user's are getting (changed the blockAfterDays to 299)

EDIT2: Adding applications section of policy. The only one that I think is odd is the Google Fi app (com.google.android.apps.tycho) which comes factory installed on some of the Pixel phones and can't be uninstalled. The phones have data only SIMs, some of which are from Google Fi. The app has to be disabled for these SIMs to work correctly - but on non-Pixel phones the app isn't usually installed. There unfortunately isn't a way I know of to both block install of an app and disable it when it can't be uninstalled.

  "applications": [
    {
      "packageName": "OURPRIVATEPACKAGE",
      "installType": "FORCE_INSTALLED",
      "defaultPermissionPolicy": "GRANT",
      "minimumVersionCode": APPVERSION,
    },
    {
      "packageName": "com.google.android.apps.tycho",
      "disabled": True
    },
    {
        "packageName": "com.android.vending",
        "installType": "FORCE_INSTALLED"
    },
    {
        "packageName": "com.android.settings",
        "installType": "FORCE_INSTALLED"
    },
    {
      "packageName": "com.android.chrome",
      "installType": "FORCE_INSTALLED",
      "managed_configuration": {
        "URLBlacklist": ["*"],
        "URLWhitelist": ["WEBSITE1", "WEBSITE2", "WEBSITEN"],
        'ForceGoogleSafeSearch': True,
        'NTPContentSuggestionsEnabled': False,
      },
      "defaultPermissionPolicy": "GRANT"
    },

    {
      "packageName": "com.google.enterprise.webapp.OURPRIVATEWEBAPP",
        "installType": "FORCE_INSTALLED",
        "defaultPermissionPolicy": "GRANT"
    }
  ],