The shares and the account are two different disclosures
The mistake is treating the RSUs as one thing to report. In Schedule FA the brokerage account and the shares inside it are disclosed separately. The account, your Fidelity, E-Trade or Schwab account, is a foreign custodial account and goes in Table A2. The vested shares themselves are foreign equity and go in Table A3.
Many returning engineers fill Table A3 with the shares, see the holding reported, and stop. But the custodial account in Table A2 is then left blank, so the account that holds everything is undisclosed. The department treats an incomplete Schedule FA as a failure to disclose the foreign asset, which is the omission the Black Money Act is built to punish. So the rule is simple: whenever RSUs sit in a foreign brokerage, both A2 and A3 have to be filled.
The calendar-year and RNOR quirks that catch people out
Schedule FA does not follow the rest of your return. The whole return runs on the Indian financial year, April to March, but Schedule FA reports foreign assets held during the calendar year, 1 January to 31 December. So the period you describe your holdings over is different from the period your income is taxed over, and mixing them up produces a wrong schedule.
The other quirk is who has to file it. Schedule FA is required only once you are resident and ordinarily resident. During your RNOR years, which a returning NRI usually gets for two to three years, you are not required to fill it. So the disclosure duty switches on the year you become ordinarily resident, and that is the first year both tables must be complete.
Why the penalty is the reason to get this right
The reason to take Schedule FA seriously is the Black Money Act 2015. Its penalty for failing to disclose a foreign asset in the return is a flat 10 lakh rupees for the year, and it applies to the omission itself, not to unpaid tax. So declaring the RSU income does not cover you if the account is missing from Table A2.
Be careful about one thing you may have read. A later change exempts smaller movable foreign assets from that 10 lakh penalty in some cases, but that is relief from the penalty, not permission to leave the asset off the return. The duty to disclose has no threshold. So the safe position is to report the account and the shares in full, every year you are ordinarily resident, and treat the penalty relief as a backstop rather than a reason to skip a disclosure.
A worked example: Karthik's Schwab account after moving to Bengaluru
Karthik moved back to Bengaluru with about 30,000 dollars of vested RSUs in a Schwab account. For his first two years home he was RNOR, so Schedule FA did not apply. In the third year he became ordinarily resident, and the disclosure switched on.
He first filed only Table A3, listing the shares, and left Table A2 blank. His CA caught it: the Schwab account itself was undisclosed, an incomplete Schedule FA and a Black Money Act exposure even though he had declared the dividends. They corrected it to show the custodial account in Table A2 and the shares in Table A3, using the calendar-year period and the right exchange rates, so both the account and the holding are on record. Karthik now files both tables every year, and the RSUs are a clean line on his return rather than a penalty waiting to happen.