=A0Is this a cautionary thing.
Yes. Indicates condition of the inside of the engine block, however, varnish is not particularly harmful. Would be better if clean.
What caused this?
Heat. Conventional motor oil "breaks down" over time. That is, viscosity index changes, volatile compounds flash off. Some varnish on the upper end - valve cover, is considered normal, less so on the dipstick.
You could check auto-rx.com.
When buying a used car, I often perform a couple of extra oil changes, to help clean up the oil. Surprisingly, even if you drain it out fairly soon, it still comes out dirty. That's the detergent working, so perhaps that helps a little. In terms of operating efficiency or longevity, probably doesn't make a lot of difference. Varnish coating internal parts interferes somewhat with the cooling effect of circulating oil. If there's enough varnish that the pistons rings begin sticking in their lands instead of sealing against the cylinder walls you'll see increased oil burning and / or loss of compression and power. Those conditions are more cause for concern.