The object cannot be updated because it is read-only
We introduced business process flow some months ago in this entity. The old entities had no process and stage ID defined. CRM 2016 wants to fix this immediately when dealing with an entity that has no process or stage defined and sets the default values.
But there is a bug in CRM. The update is made on inactive entities as well. Thus the error.
The only solution is to update the values directly in the database:
UPDATE ENTITY SET ProcessId = PROCESSGUID
, StageId = STAGEGUID WHERE (ProcessId is null or StageId IS NULL) AND StateCode = 1