What is wrong with this drive? I've tried to create this partition and use Carbon Copy Cloner to copy over everything from one Mac. However, it shows this error on another Mac when I launch Disk Utility and try to repair it:
In technical terms it is "messed up too much" for disk utility to handle. You now have two choices. Do as it suggests, back up and reformat or use a third party disk utility that might fix the issue.

I'd do the latter but then I always have an up to date copy of diskwarrior already on hand. There are other disk repair utilities, that one is my personal favorite YMMV.