There can be several possible reasons for this error:
1) If the parameters are in the function's workspace so they are not accessible to the model. You can resolve this issue by including the following in your function:
>> assignin('base','name_of_var', name_of_variable);
2) Comparing to the time when the protected model was created, if the Simulink parameters are called with different values in datatype, dimensions, Max/Min value, or unit. For example if you have the following case:
You create the reference model and protected model while the following variable (used in the model) is in the base workspace:
>> var1.Value = [1 2 3 4]
It is a 1x4 array. If you then try to use the protected model using a "var1" with different dimensions like
>> var1.Value = [1 2]
you will get an error saying that the variables used by the protected model are incompatible with the variable that existed when the model was created. This happens because the files generated when creating the protected model have the dimensions of the Simulink parameters hard coded.
