No, it means that the file isn't tagged for one game or the other. Since each game version some data unique to it (dialog.tlk, etc.), Kotor Tool has to ask you to identify which one a file is for. Once you've saved a file, it's tagged with the game version number, editing date and Kotor Tool version, so it won't ask again in the future.
Now, if after you specify the game version an error occurs, there might be a problem. If you can view the .git using the View GFF Files as Text function and you don't get an error, the file is OK, but one or more values is out of range for the game. If the View GFF... function fails, your file is corrupt.
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