Hierarchy Security setup error - Message: Invalid argument

When I was setting up Manager Hierarchy Security in our Dev instance today, I faced this weird error:

This was happening when I am trying to exclude the entities from hierarchy.

Unhandled exception:
Exception type: System.ServiceModel.FaultException`1[Microsoft.Xrm.Sdk.OrganizationServiceFault]
Message: Invalid argument.Detail:
<OrganizationServiceFault xmlns:i="http://www.w3.org/2001/XMLSchema-instance" xmlns="http://schemas.microsoft.com/xrm/2011/Contracts">
  <ActivityId>c3e29cba-ca14-44a3-a733-9265fb947ae4</ActivityId>
  <ErrorCode>-2147220989</ErrorCode>
  <ErrorDetails xmlns:d2p1="http://schemas.datacontract.org/2004/07/System.Collections.Generic">
    <KeyValuePairOfstringanyType>
      <d2p1:key>ApiExceptionSourceKey</d2p1:key>
      <d2p1:value xmlns:d4p1="http://www.w3.org/2001/XMLSchema" i:type="d4p1:string">Plugin/Microsoft.Crm.ObjectModel.HierarchySecurityConfigurationService</d2p1:value>
    </KeyValuePairOfstringanyType>
    <KeyValuePairOfstringanyType>
      <d2p1:key>ApiOriginalExceptionKey</d2p1:key>
      <d2p1:value xmlns:d4p1="http://www.w3.org/2001/XMLSchema" i:type="d4p1:string">Microsoft.Crm.CrmException: Invalid argument. ---&gt; Microsoft.Crm.CrmException: Invalid argument.
   at Microsoft.Crm.ObjectModel.HierarchySecurityConfigurationService.Create(IBusinessEntity entity, ExecutionContext context)
   --- End of inner exception stack trace ---
   at Microsoft.Crm.Extensibility.VersionedPluginProxyStepBase.Execute(PipelineExecutionContext context)
   at Microsoft.Crm.Extensibility.PipelineInstrumentationHelper.Execute(Boolean instrumentationEnabled, String stopwatchName, ExecuteWithInstrumentation action, PipelineExecutionContext context)
   at Microsoft.Crm.Extensibility.Pipeline.&lt;&gt;c__DisplayClass2_1.&lt;Execute&gt;b__0()</d2p1:value>
    </KeyValuePairOfstringanyType>
    <KeyValuePairOfstringanyType>
      <d2p1:key>ApiStepKey</d2p1:key>
      <d2p1:value xmlns:d4p1="http://www.w3.org/2001/XMLSchema" i:type="d4p1:string">5315ffbc-8161-4c71-abd2-7dc93de00e8b</d2p1:value>
    </KeyValuePairOfstringanyType>
    <KeyValuePairOfstringanyType>
      <d2p1:key>ApiDepthKey</d2p1:key>
      <d2p1:value xmlns:d4p1="http://www.w3.org/2001/XMLSchema" i:type="d4p1:string">1</d2p1:value>
    </KeyValuePairOfstringanyType>
    <KeyValuePairOfstringanyType>
      <d2p1:key>ApiActivityIdKey</d2p1:key>
      <d2p1:value xmlns:d4p1="http://www.w3.org/2001/XMLSchema" i:type="d4p1:string">c3e29cba-ca14-44a3-a733-9265fb947ae4</d2p1:value>
    </KeyValuePairOfstringanyType>
    <KeyValuePairOfstringanyType>
      <d2p1:key>ApiPluginSolutionNameKey</d2p1:key>
      <d2p1:value xmlns:d4p1="http://www.w3.org/2001/XMLSchema" i:type="d4p1:string">System</d2p1:value>
    </KeyValuePairOfstringanyType>
    <KeyValuePairOfstringanyType>
      <d2p1:key>ApiStepSolutionNameKey</d2p1:key>
      <d2p1:value xmlns:d4p1="http://www.w3.org/2001/XMLSchema" i:type="d4p1:string">System</d2p1:value>
    </KeyValuePairOfstringanyType>
  </ErrorDetails>
  <Message>Invalid argument.</Message>
  <Timestamp>2019-03-21T15:11:42.6102778Z</Timestamp>
  <ExceptionRetriable>false</ExceptionRetriable>
  <ExceptionSource i:nil="true" />
  <InnerFault i:nil="true" />
  <OriginalException i:nil="true" />
  <TraceText i:nil="true" />
</OrganizationServiceFault>

I thought some limit may be there, so did some trial & error to troubleshoot. No clue, then went with batch by batch of five entries at a time to exclude the entities.

Gotcha! The problem is with the Holiday Wrapper entity, for some reason I could not exclude this.

After keeping that HolidayWrapper entity in Available entity list - this error was not happening.