That's going to double count because the SUM(COUNTIFS()) syntax basically creates 2 countifs formulas, 1 for <>production, and 1 for <>pvt. Then sums the result of the 2.
You need to just add a 3rd criteria to a plain old countifs
COUNTIFS($D$2:$D$10,"Severity 1",$G$2:$G$10,"<>Production",$G$2:$G$10,"<>PVT")
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