It looks like your teacher is using MATLAB Grader for this problem. Because of variable scope in a function, MATLAB Grader is calling your function with inputs your teacher defines, and assessing the outputs. It can not check any other variables. The outputs are captured in variables your teacher has named, which is why you see an error message about a variable your code does not create.
It would appear the output variable they named res is not being assigned the expected value by your function. The inference, then, is that your function has not been properly implemented.
I think it's safe to assume res = residual. Check how you are calculating your residual. Compare to your notes from class. If there is any feedback provided in this assessment test, use that to help find your mistake.