On the XML Sitemap settings page you can find Configuration option that allows you to review/use one of the existing configurations or create/save a new one.

In your robots.txt file there is a link to the generated sitemap, e.g. http://STORE_URL/xml_sitemap.php?config_profile=small. It means that only categories specified in this configuration profile are being exported.

Bad configuration name specified:

This error appears if the Configuration Profile name is set incorrectly, e.g. http://STORE_URL/xml_sitemap.php?config_profile=sm

To solve this issue please check your robots.txt for this link as well as the XML Sitemap settings page of your Admin section to find out if this configuration name exists.

Then change the URL in the robots.txt, so it lists one of the existing configurations.