Working as intended. Anything transferred from the previous generation cannot be currently-handled by the previous-generation-OT, as we're in a future generation where the OT does not exist.
>when in fact, wouldn't the issue exist if the save had the same details as the Zeraora OT?
1:4billion chance to get the same ID, and picked the same exact OT for the save file it's currently on. Statistically never going to happen, hence illegal.
The green highlight indicates who is currently handling it. If the green highlight is set for the OT and it cannot be legally set to the OT, then it is flagged as illegal.