This is a known issue and Apple is looking into why the message is erroneously displayed. The G3 Firmware Update installs version 1.1f4 of the Boot ROM and should be new enough to avoid this message.
This message can be ignored if the Power Macintosh G3 (Blue and White) has been updated. To check the Boot ROM version, start up into Open Firmware by holding down the Command-Option-O-F keys. The Boot ROM and Open Firmware versions will be listed. To continue starting up, type "mac-boot" and press the Return key.