What is indicated when a vessel only exhibits three all-round lights: upper red, lower red, and middle white?

The scenario described—where a vessel displays three all-round lights: an upper red light, a lower red light, and a middle white light—indicates that the vessel is restricted in its ability to maneuver and is not making way.

According to the international regulations for preventing collisions at sea (COLREGs), a vessel that is constrained by its draft or is otherwise unable to maneuver owing to the nature of its work or the environment will display this specific configuration of lights. The upper and lower red lights signal the nature of restriction, while the middle white light denotes that the vessel is not making way through the water. This combination effectively communicates to other vessels that they should navigate with caution around this particular vessel due to its limitations.

The other options do not align with the specific light configuration detailed in the question. For instance, a vessel engaged in fishing would typically display a different set of lights, specifically showing a combination of green lights or signals related to their fishing activity. Similarly, vessels at anchor would display a single all-round white light, and those carrying hazardous materials would also adhere to different lighting requirements reflective of their specific operational status.