How Do I fix this and what is causing the issue?
There's details here on how to keep VST2 and VST3 on Windows. If you're on a Mac I'm not sure how it works, but @Kymeia can probably help.
How to Keep Komplete Kontrol 2.9 (VST2) and Komplete Kontrol 3 (VST3) on Your Windows System – Native Instruments (native-instruments.com)
Do you have a MK3 keyboard? If you don't I'd suggest uninstalling the 3.x version of Komplete Kontrol and installing the 2.9.6 version. That way you'll have a working VST2 and VST3 version of the plugin and you can go back to the old projects and update them one by one to use the VST3 version of the plugin. Once you've updated old projects you can update to the latest version of Komplete Kontrol.
-- Mike
Did you just update from Komplete Kontrol 2 to version 3? If you did and you have the VST2 version of KK in old projects they'll stop working as KK3 removed the VST2. You'll need to roll back to 2.9.6 to fix it. You can download that here - Komplete Kontrol 2.9.6 - Last VST2 supported version — Community (native-instruments.com)
If you've just upgraded to a MK3 keyboard that won't work with KK2 which is a whole new problem.
Well first you need to let it scan your library - that is not an 'issue' and if you don't let it happen that would also account for some projects not working
If you were running VST2 plugins inside of the KK VST3 then you also need to add the VST2 path in KK3 settings and let that rescan VST2 plugins - if you are on Apple Silicon you also need to do that in Rosetta mode for the standalone and any host that you run KK3 in
Yes I did. So If I download the old version. I'll be able to run both simultaneously? So that I can continue my old projects without problems?
Right now I have the Mk2 keyboard. I guess in that case uninstalling 3.x is the easiest way for now then?
It's the easiest and quickest way to get your projects back working again yes. You can update to VST3 at your leisure while you have 2.9.6 installed them update to version 3 once you've done that.