This is poor UI design and on-screen instruction. The Blizzard quest tracker says “you don’t have space to track any more objectives”, that’s OK but then it’s proposed solution is retarded, “stop tracking some first”.
What it should say is “make the tracking box bigger, so you get more space”.
So all you have to do is drag the tracking window’s frame down to make it as big as possible.
Pictures here speak louder than words.
This post won’t fit on a narrow screen, so click the images to see detail.