You should be able to log in again now and this false positive will not happen again.
Regarding the DNS zone, it is not going to ever work as it is currently configured as it has not been set up properly.
There are two ways to connect a domain to a site at Netlify:
Of the two methods, the external DNS instructions is the one I would recommend using to start. Please note, if you use that method, you must also delete the inactive Netlify DNS zone as well.