Danny & Mike --- THANKS !
Your diagnosis was exact. The fix was easy (and confirmed by no warning for a subsequent assignment).
In hindsight, I created this scenario by adding two logins for a math-ed major who will aide discussions during my calculus class. After creating the classlist file in my standard way, I appended two lines for her: one as a student, other as a TA --- both with status omitted. I've since changed her status to Audit for both logins.
a) there is a wiki page with mildly misleading info that C is default status --- Mike's "making some adjustments" phrase clarifies that the warning affirms the default.
b) statistics need to be fixed because performance by an Audit is NOT omitted from the summary presentation. (OTOH: I suspect the statistics module has deeper defects.)