there is not enough extra media beyond clip edges to create the transition.

Search this forum for "Media handles" for more info.

This means there is spare media on one or both sides of a clip.

Or put another way, in/out points are not at the extreme start or end of a clip when it is entered into the Timeline from the Browser.

One way to tell is move the curser in the Timeline to the start or end of a clip,

The colours mean something:

The above means, no Media Handles available at the end of this clip

This one means there is some Media Handles available and can be dragged left to lengthen the clip, when it turns RED then it's at the extreme start. Meaning FCP X cannot create a transition unless you tell it to CREATE one. Hitting the create button will shorten the Timeline. That is not really a problem unless frame accuracy is paramount.

Here is the same clip in the Browser with Used Media Ranges switched on:

Note that the Orange Used Media Range line indicates some not used media at the start and no room at the end.

Both the above examples should help you identify which clips have media handles.

There are other ways if you want to SEARCH.

Al

what frequently went wrong in my projects:

I add an 'halt' at the - what I believe - very last frame of a clip.

But often, it is the last-before-one.

So, a tiny single frame cuddles btw. two clip… when you drag a transition onto the end of the big one, that error message comes up.

Or, another left-over from a gap.clip plays hide'n seek.

The Index is then very helpful, on first sight into the timeline, I see two clips, the Index tells me wrong:

So, although you're an experience editor, I'd like to recommend, check for 'stray singles' btw. clips.

Try resetting the FCP X preferences.

Hold Option-Command as you launch FXP X.

Al