You can't use the Component Operation - Cut Out function if the parts being referenced or cut contain assembly level features. An example would be you have an assembly of a few parts that gets welded, then a machining sequence creates features at the assembly level (cuts are modeled as featues at that assembly level in Pro). You then want to take this assembly and overmold it with plastic. Ideally you could represent this in Pro by removing the geometry of the welded & machined assembly from the plastic by using the Cut Out function. Pro won't do it - basically it's a forbidden combination of operations / feature types. I'd have to see what you're doing to see if there is a workaround - sometimes you have to mimick what Cut Out would do with additional assembly cuts - or - find a different way to represent machining done at an assembly level so Pro does not see the geometry as an assembly level feature.
Also - you may want to move this discussion to the Creo Parametric area since it's a Creo CAD question, not a Windchill question.