May have worked it out, the clue is in FENCE_AUTOENABLE.
When set to 1, geofence automatically enables after an auto takeoff and automatically disables at the beginning of an auto landing.
When on the ground before takeoff the fence is disabled.
When set to 2, the fence autoenables after an auto takeoff, but only disables the fence floor during landing.
It is highly recommended to not use this option for line of sight flying and use a fence enable channel instead.
I did a manual takeoff, not an auto takeoff, so the fence never enabled, hence the error message.
So I the question now is can I have the fence always enabled (or enable on any takeoff) and still disable the floor during landing ?