What action must be taken if a defect cannot be resolved within the current iteration?

When a defect cannot be resolved within the current iteration, creating capacity for higher priority defects is a critical course of action. This approach ensures that the development team can focus on addressing the most significant issues that impact the product's functionality or user experience. By prioritizing defects, the team can allocate resources effectively, a fundamental aspect of agile methodologies where swift responses to changing conditions are essential.

The decision to create capacity typically involves re-evaluating the tasks in progress and possibly adjusting the team's workload to ensure that the highest priority issues are addressed timely. This practice maintains the quality of the product and aligns with the principles of delivering value to users, which is central to iterative development.

In contrast, overlooking the defect or postponing its resolution would allow potentially significant issues to persist, ultimately affecting the overall product quality. Notifying stakeholders might be necessary, but it does not directly address prioritization and resolution. Placing it in the completed backlog could imply a lack of accountability for the defect's timely resolution, which does not align with best practices in project management. Thus, focusing on higher priority defects ensures that the team remains agile and responsive to the most pressing issues.