issue with FCPX transition drag and drop and grouped clips...

You need to learn the concept of "Handles": these are the pieces of your clip that are before the start point and after the end point. The handles are used to create the transitions. One nice way to see how this works is by using the "Precision Editor" (to see it, select an edit point and hit Ctrl-E). In this picture, the parts surrounded by a red rectangle are the handles:

If you select the edit point and the select is in red, that means there is no handle there (no extra frames that can be used). When there are no handles, you either can't make a transition or get this dialog:

If you go ahead and click "Create Transition", the clip(s) will be shortened, because FCP will "pull" the right clip onto the left one to make the transition.

Ungroup the clip, add the necessary transition and regroup again.

Clearly, something is not working well.

Did you try to trash the preferences?

Having same frustrating problem. I just tried command T and it is working. I click on the clip right at the end or beginning. After I get a red outline, "Command T" works. Seems to just put the cross dissolve on, but that's good enough for me right now. Guess it's time for a "One to One" session on this.

Current bug, I get the error and and when I click "Create Transition" nothing happens. Regardless of whether I drag in a dissolve transition or use the keyboard shortcut. This seems to have started happening after the update, although I don't really know when.Anybody figured out a work around? I can drag in a non-dissolve transition and then add dissolve, but this is time consuming when considering adding hundreds of transitions with hours of editing.

Current Verision, 10.0.9

Mac Pro 2011 8-Core

Just want to echo the frustration of the other members here: I'm having the same issue - no matter what I try I get the same error message that 'offers' to 'Create the Transition' for me, with no result. Utterly maddening 😟

PLease start another thread with details of your problem. This thread is 4 years old and May not the relevant. The application is working correctly. Give details of your process.