A warning message is generated because the coefficient for is not a scalar:

This shows a correct input:

The point of Inactive PDE coefficients is to maintain their structure for the finite element PDE parser. This, however, means that arithmetic operations you would expect to work on normal expressions can be problematic. Consider the following equation terms and the operation on them:

To make the operation work, perform the arithmetic operation on the coefficients directly:

Note that this issue may come up in any inactive PDE component, not only in the one generated by PDE Terms:

Again, the fix is to perform the operation on the coefficients directly: