I have setup MySQL replication but I am seeing an error in the problem checker reporting tht it is unable to connect to the instance replica.

This error indicates that either the replica server is unavailable or the credentials provided do not allow the problem checker to query the replication status.

Check the status of MySQL on the replica server

systemctl status mysql

A failed or stopped status will need to be investigated by a server administrator with MySQL access.

Active/running indicates that MySQL is working as intended, please check the provided replication credentials and that the user specified has sufficant permissions.