This exact scenario happened to me recently. I am on 16.5 SP055 PL02 (16.5.5.2). I was troubleshooting a problem with the new PowerDesigner Web application and was advised to upgrade "it" only to PL03 by executing the portal install. Once that happened, everyone started receiving the situation to 'upgrade the repository". I, of course, didn't want to do that because that is a big deal to the DBA folks in our company. I basically had to reset everything to PL02 by uninstalling and reinstalling the proxy and the portal applications on the server. I did execute the upgrade script on the repository again.
I am not sure why the proxy was affected by installing a newer version of the portal, but apparently it was. Once I made sure everything was at the same patch level and the repository was "reset", the message went away.
Not sure if this will help you, but that is how I resolved my issue.