"Phone reset cannot be done. You either entered invalid email address or you are not allowed to initiate phone reset. You are allowed to reset phone number only in case that you are administrator in all accounts where user has non-customer access." error
When using 2FA by Phone, the phone number is associated to the email used for login.
You can click Remind Me Later to dismiss this prompt five times. After the fifth time, you are required to set up an authenticator app or register your phone number.
The user was not able to complete the registration of Phone number that is why the Administrator cannot initiate the reset. Users are allowed to reset phone number only in case that the user are administrator in all accounts where user has non-customer access as well.
Note: 2FA by Authenticator App is currently only available in Release Preview accounts hosted in North American (NA) data centers. It is not available in EU Release Preview.