The warning is exactly right. Your function wants an array of pointers. You're giving it an array of arrays.
Expected:
sep_foo:
+------+ +-----+
|char**|--> 0: |char*|-->"string1"
+------+ +-----+
1: |char*|-->"string2"
+-----+
*sep_foo_qty-1: |... |
+-----+
What you provided:
sep_foo:
+--------------------------------+
0: | char[MAX_STRING_LENGTH] |
+--------------------------------+
1: | char[MAX_STRING_LENGTH] |
+--------------------------------+
MAX_QTY-1: | ... |
+--------------------------------+
An array with elements of type X can "decay" into a pointer-to-X, or X*. But the value of X isn't allowed to change in that conversion. Only one decay operation is allowed. You'd need it to happen twice. In your case, X is array-of-MAX_STRING_LENGTH-chars. The function wants X to be pointer-to-char. Since those aren't the same, the compiler warns you. I'm a bit surprised it was just a warning since nothing good can come from what the compiler allowed to happen.
In your function, you could write this code:
char* y = NULL;
*sep_foo = y;
That's legal code since sep_foo is a char**, so *sep_foo is a char*, and so is y; you can assign them. But with what you tried to do, *sep_foo wouldn't really be a char*; it would be pointing to an array of char. Your code, in effect, would be attempting to do this:
char destination[MAX_STRING_LENGTH];
char* y = NULL;
destination = y;
You can't assign a pointer into an array, and so the compiler warns that the call is no good.
There are two ways to solve this:
Change the way you declare and allocate sep_foo on the calling side so it matches what the function expects to receive:
char** sep_foo = calloc(MAX_QTY, sizeof(char*));
for (int i = 0; i < MAX_QTY; ++i)
sep_foo[i] = malloc(MAX_STRING_LENGTH);
or, equivalently
char* sep_foo[MAX_QTY];
for (int i = 0; i < MAX_QTY; ++i)
sep_foo[i] = malloc(MAX_STRING_LENGTH);
Change the prototype of the function to accept what you're really giving it:
int parse(const char *foo, char sep_foo[MAX_QTY][MAX_STRING_LENGTH], int *sep_foo_qty);