Sometimes, the error is purely a software glitch. If your Labels folder in the VCDS directory is missing subfolders (English, German, etc.), or if the .lbl and .rod files are corrupt, the software cannot load the necessary data to identify the module.
I recently attempted to use my genuine Hex-V2 interface on a non-VAG vehicle (a Ford Transit) and an older rare VAG prototype. The software launched fine, but upon connection, I was immediately greeted with a red banner: "Unsupported Vehicle – Check for Beta Update." vcds unsupported vehicle