I agree the logic is wrong - if you are applying VPN policies then it should be obvious that “all MAC address” is the last thing you are looking to do (otherwise you would turn off the VPN!).

I think the answer would be:

  1. to move the “all mac address” to the drop down list, or better, remove it completely (as per above logic).
  2. to give an error when clicking apply until something has been selected.