MAX10 Discrete I2C implementation of RSU issue

Greetings,

I'm using Quartus 16.1 and trying to implement remote system upgrade over I2C using a discrete implementation on a MAX 10 (10M08SAE144C8G). After viewing the training videos it is clear that there is a requirement to use dual compressed image in QSYS. When this is done and the design is compiled, the error "14740 Configuration mode on atom ...|ufm_block does not match the project setting" is produced. If I change the QSYS setting to single uncompressed image the compilation completes without error. I don't know if the design works with this setting yet but it seems inconsistent. Am I missing some setting in the Quartus project that must be set to use dual configuration?

Any suggestions for resolving this issue would be much appreciated.