Sometimes we get error messages that aren’t exactly descriptive enough for us non-computer-scientist-types to figure out what they mean or what they relate to. The “physical material needs to be rebuilt” it something that had me stumped (but then I was never very good at puzzle games). If you want to figure out this particular puzzle yourself, I can give you two hints, as well as the spoiler free solution further down.
The first word I’ve skipped is LANDSCAPE. So it’s related to a landscape object in the scene. That’s a good start. The second clue is in the last word, which is REBUILT. Our solution is likely to be found in the Build menu.
I’m embarrassed to say, I didn’t work this out by myself.