Seems fine. "Not enough material for overlapping transition" is a message never seen here.
Under OPTIONS | EDITING tab | Video Clip Transitioning it's likely set to ASK.
Clip length isn't the issue. What makes the difference is whether there is sufficient excess at the end of the FROM clip and the head of the TO clip to cover the dissolve length.
If not, it will prompt. Choose FREEZE and each clip will be frozen at halfway through the trans, which is usually fine for quick transitions.
Choose OVERLAY and the clips will be shifted to make room, which can throw off sync on independent audio tracks.
If possible, upgrade to the latest version. For licensed users upgrades are free for up to six months from purchase date. After that, VP will continue to fully function but a fee will be required in order to register the newest. Retain your old install file and registration info.
Record_2020_11_29_16_06_04_529.wmv