Answer
A Crystal report server instance needs to actually be registered as an application, not just exist as a folder — if it shows up as a folder, try RMB > Convert to Application on that node first. If that option doesn't resolve it, the more reliable fix is to set that broken instance aside (to delete later) and create a fresh instance by following the technical documentation's setup steps from scratch, then update the relevant system parameters to point at the newly created instance instead of the broken one.