Not sure on the error. But for this kind of mission, place a marker over the enemy occupied area and name it. Then place a marker over the rest of the map and name it.

For the enemy, place a Military AI commander module, and place a military civ objective and military mil objective module. In the objective modules, put the name of the marker over the area you want them occupied in the AO field. And put the marker name that's over the rest of map in the blacklist field.

Sync the objective modules to the AI commander.

For your side, place the same modules down and sync them in the same way. In the blacklist line in the objective modules, put the marker name for the enemy occupied area.

Then place a few custom objective modules down over the enemy occupied area (using either the place units or objectives only option depending on the number of units you want in this area), and sync these modules to both military AI commander modules.

For this kind of mission, you don't need high command. You can access your friendly units and adjust their waypoints using the commander tablet (it's under objectives). Though fair warning the way ALiVE spawns units, the enemy AO may not spawn enough enemies for your taste, so feel free to use a CQB module and only allow them to spawn in the enemy AO, and you also may need to manually place some units too just to fill out the battle area.

You can make this as large or small as you want. Here is one trick I use with ALiVE to get more enemy spread out and securing more areas of a city (rather than having one unit sitting right in the middle of town and that's it)

If the entire scenario is only taking one city....what I might do is place a Military Commander module down for your enemy and then sync it to 3-4 custom objective modules placed at strategic points in the city. Then I set the size to be very small (20-30) and priority to be high (100-200). That way the enemy commander will have troops at each critical point of the city and will fight hard to hold them due to their importance.

This trick also works when designing missions where the human players are defending a city. The AI will attack ruthlessly trying to secure the high priority objectives.