Reason: Invalid Items found - ShipmentId [FBAXXXXXXXXX] MerchantCustomerId [XXXXXXXXXXXXXX] InvalidItems[ (skuType=MSKU, sku=XXXXXXXXXXXX, reason=INCOMPATIBLE_HAZMAT_STATUS)
This error can return if items being added to an existing shipment do not contain hazmat items but you are trying to add hazmat items to it, or vice-versa. This is because Amazon will not allow hazmat items to be added to the same shipment as non-hazmat items, so they will kick back that error when an item is incompatible.
For more information on the terms & conditions of their Hazmat program, please take a look here- FBA Dangerous Goods (Hazmat) Program Terms and Conditions
When you list in a Private batch in Stratify, Amazon should separate hazmat and not non-hazmat items into separate shipments once you get to the Proposed FBA Shipment page automatically. You wouldn't be able to combine the items into existing working shipments containing items with a different hazmat status.
To check if items in your batch or current shipments are considered hazmat, you can use the steps in this article to do this in Seller Central- Look Up Dangerous Goods or Hazmat Status In Seller Central