The hood tach I bought from Classic in 2004 said the same thing, but when I installed the HEI and wired it up, all was well and the tach read just fine. Still does to this day.
Not sure why some repros are concerned about the HEI versus points. In my research it seems the "TACH OUT" connection on the HEI itself is properly prepped to send the appropriate signal to the tach.
'68 428 HO M3 Monster, 4-on-the-floor! Need I say more?