Your current formula is returning true (throwing the error) if one or more of the following is true:
Form_Type__c = 461,
Form_Type__c = 465,
Status__c = Approved.
The OR operator returns true if either of its two conditions are met. In your case, since you have a nested OR, if either
Form_Type__c = "461" or
Form_Type__c = "465" is true, then the first outer OR condition is met, returning true; additionally, if the second condition of the nested OR
ISPICKVAL( Status__c , "Approved") is true, your OR operator also returns true. As a side note...currently, your AND operator is doing nothing, as you have only one condition inside of it.
Either of these will work, depending on your preferred syntax:
(Form_Type__c = "461" || Form_Type__c = "465") && ISPICKVAL( Status__c , "Approved")
AND( OR(Form_Type__c = "461", Form_Type__c = "465"), ISPICKVAL( Status__c , "Approved"))