Officially this combination is unsupported, however, if you have the AP-103 (not IAP-103), and the firmware version on the controller supports the AP-103, there are reports that this may work.
If you do a 'show log all' on the controller, it will probably give you an indication why the AP went into AM mode. What happens sometimes is that you have a Rest-of-World AP and try to connect that on a US controller. That is not allowed by regulation, as US controllers and APs can only be used in the US and are not allowed outside the US; so a combination is not possible. The controller will switch the AP to Air Monitor to avoid that legal situation, with a message that is something like 'regulatory mismatch' in the system log.