The error is real - it is caused by Plasma settings → Removable Storage → Removable Devices → Uncheck On Login and On Attach
I banged my head at it 5-6 times before I realized what was going on - a test system to locate another inconsistency in Plasma (Does Fall Apart effect work in your Kde Plasma?).
I saw another topic with the same issue
The error may also indicate the partition is mounted and the installer cannot format the partition.