This is my Lc3 Assembly code
.ORIG x3000
AND R0,R0, #0
AND R2,R2, #0
ADD R2,R2, #7
JSR SUB
ADD R2,R2, ASCII
ADD R0,R2,#0
TRAP x21
SUB ADD R2,R2,#9
ADD R7,R7,#1
RET
HALT
ASCII .FILL x0000
.END
When I try to assembly the code, I got these errors

I know that pass 1 refers to the first step in the assembly process which is to add variables and what values they are holding to the symbol table. I know that step 2 is to substitute values using the symbol table. (Using Lc3 Assembly as a reference)
Can anyone explain why the assembler is trying to substitute in the first pass and causing the error? Shouldn't pass 1 be recognizing ASCII as a variable that holds x0001 and not attempting to substitute it?