You aren't experiencing an error or failure. The IP address assigned to the interface is because of automatic private IP addressing (APIPA). It's used because the DHCP process did not receive a valid usable IP address.
Microsoft offers guidance on automatic IP addressing without DHCP:
How to use automatic TCP/IP addressing without a DHCP server
And from a related bulletin (using APIPA on multiple adapters/routing not working):
Disable APIPA on the Entire Computer
Use Registry Editor to create the following registry key:
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\Tcpip\Parameters
Add the following value to this key:
Value name: IPAutoconfigurationEnabled Value type: REG_DWORD Value in
hexadecimal: 0 (A value of 0 disables APIPA support on this computer)
NOTE: If the IPAutoconfigurationEnabled entry is not present, a
default value of 1 is assumed, which indicates that APIPA is enabled.
After you make this change, restart your computer.
Disable APIPA on All but One Network Adapter
Use Registry Editor to create the following registry key, where
adapter name is the name of the Dynamic Host Configuration Protocol
(DHCP) configured adapter where you want to disable APIPA:
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\
Services\Tcpip\Parameters\Interfaces\adapter name
Add the following value to this key:
Value name: IPAutoconfigurationEnabled
Value type: REG_DWORD Value in hexadecimal: 0 (A value of 0 disables APIPA support on this adapter)
NOTE: If the IPAutoconfigurationEnabled entry is not present, a
default value of 1 is assumed, which indicates that APIPA is enabled.
After you make this change, restart your computer.