Materia and aetherial attributes could not be restored

[Conradus]

"Eqipped, but materia and aetherial attributes could not be restored" is the message you get when the Armoury can only find a piece of equipment in your Chest that matches what you registered, but not the materia it had when you registered it. It'll go ahead and equip it, but you get the message (you get a similar message about how it's a different color if it's dyed differently from what you had registered). If you added materia to the equipment after you registered the gear set, you'll get this message. It'll go away if you just reregister the gear set. As for the stuff in red--some materia will meld but you won't get its full effects (or even any effect) because it's a bad match with the equipment you melded it to. It'll warn you about this when you set up the meld; you may not have noticed that. That's a separate matter from the gear set message.