When the “HCL” checkbox is not checked, Terraform Cloud interprets the contents of the “Value” box as a static string
value, not as an HCL expression. We can see in the error message there that indeed Terraform cloud has wrapped the exact string you entered in quotes and escaped the quotes inside, causing Terraform Core to interpret it as a string that happens to contain brackets and quote marks.
Marking it as HCL causes Terraform Cloud to pass the value to Terraform Core as a general expression, which means you
can then produce values of types other than string.