Its a 8.1 issue. Looks like a lot of people who upgraded are facing this issue. Instead of syncing "All Calendar", I selected the folder one level below instead and the error disappeared.

Yeah it doesnt. Its more of a safety percaution for me in case the phone goes crazy, at least all the calendar info's backed up so you can sync it back if you have to restore your phone. Just last month my phone went nuts.. lost all my music and videos - all showed up as "other" but disappeared from the library. Had to do a restore.