What causes error "The volume key is unknown for this disc - video can't be decrypted"?
This error occurs when you open an incomplete blu-ray disc backup. The most common case is an ISO file saved from a PS3 drive. Having just ISO image or Blu-ray files isn't sufficient to decrypt M2TS files, you either need to have an 128-bit "AACS volume ID" (MakeMKV reads it automatically from original disc) or need to know a disc-specific "AACS volume key" for that particular disc.
Please see this question for details.