You selected the "Drop the Lowest" grade option and the since This occurs when your grade Category is configured to drop the lowest score, and you Grades settings are configured to ignore ungraded items. Because there is only one grade to reportin the category, it is now the lowest so it gets "dropped." But don't worry, the grades are still there and you and your students can still get to them. If score so all grades in that item are flagged as "Dropped." Once you grade additional items in that category the Dropped flag will update to reflect the lowest grade for that student.
If you want, you can delete remove the "Drop the Lowest" grade option until and add it back later, after you have at least two grade graded additional items in the that category to avoid confusion.