On experience manager, invalid category added when user makes taxonomy a mandatory field

Steps :

1. Go to document type
2. Add taxonomy in any document type, say events
3. Make taxonomy field a mandatory in event document type
4. Go to experience manager > look for taxonomy field

Actual result : On right hand side panel, some distorted icon display on hovering and on clicking "Select taxonomy term" invalid category display in dialog.

Expected result : Taxonomy terms should display without any invalid category.

Screen-recording

Additional Observations :
1. Mandatory multi-select display with 2 "**" astrix sign
2. Mandatory multi-select also seems broken when taxonomy has this "invalid category". However, when user remove this invalid category multi-select start to work like usual.