Decagon soil moisture sensors respond to the dielectric constant of their media; essentially, that media's ability to store an electric charge. Water has a dielectric constant of around 80, soil ~ 5, and air has a dielectric of 1. Decagon soil moisture sensors are calibrated to soils. Oven-dry soil has a volumetric water content of 0 by definition (~ 5 dielectric). If your probe is reading in the air (dielectric of 1), then its volumetric water content (VWC) will quite naturally be a negative number.

There are a couple of situations in which a probe installed in soil will have a negative number. Dry soils with an air gap next to the sensor may show negative numbers. Air gaps can be a result of improper installation or disturbance to the probe. Soils with high organic matter contents or unusual mineralogy may also give negative numbers. Remember that the dielectric of soil is assumed to be ~5, situations in which that assumption is invalid (such as with high organic matter contents) may result in the calibration underestimating the VWC. This problem is easily corrected with a soil-specific calibration.