Why Is Ansible Tower Inventory Sync Job Failing With Error 'Attempting to decrypt but no vault secrets found' ?

Issue

I'm using an inventory sourced from a SCM Project with Vaulted vars file using Ansible Vault, with the following structure.

inventories/hosts
inventories/host_vars/host01/vars.yml
inventories/host_vars/host01/vault.yml

(hosts)

[hosts]
host01

(vars.yml)

admin_pass: "{{ admin_password }}"

(vault.yml) … encrypted file by ansible-vault

$ANSIBLE_VAULT;1.1;AES256
34383734303865616238613030383336356436356464393262313134633466376662656561393736
6538646130303039383939636538363163633031636635650a373436353337363936653539376233
32323835396235313633666465383337323239666637333136613831303735663766316637666439
3839356632663538310a356664326363623134333265343965663539303264653538653063666536
65346532383231353035653536343137633962653439306166303961366465386330

The inventory sync using the SCM project, fails with the below error.

RuntimeError: ansible-inventory failed (rc=4) with stdout:
stderr:
ERROR! Attempting to decrypt but no vault secrets found