When you want to update your minSdkVersion in an existing Android project...
- Update build.gradle (Module: YourProject)under Gradle Script and
 make sure that it is NOTbuild.gradle (Project: YourProject.app).
An example of build.gradle:
apply plugin: 'com.android.application'
android {
    compileSdkVersion 28
    buildToolsVersion "28.0.2"
    defaultConfig {
        applicationId "com.stackoverflow.answer"
        minSdkVersion 21
        targetSdkVersion 28
        versionCode 1
        versionName "1.0"
    }
    buildTypes {
        release {
            minifyEnabled false
            proguardFiles getDefaultProguardFile('proguard-android.txt'), 'proguard-rules.pro'
    }
}
dependencies {
    androidTestCompile 'junit:junit:4.12'
    compile fileTree(dir: 'libs', include: ['*.jar'])
}
- Sync gradle button (refresh all gradle projects also works).

or

- Rebuild project
After updating the build.gradle's minSdkVersion, you have to click on the button to sync gradle file ("Sync Project with Gradle files"). That will clear the marker.
Updating manifest.xml, for e.g. deleting any references to SDK levels in the manifest file, is NOT necessary anymore in Android Studio.