The error message occurs when the email address has already been associated with another user who can either be an agent/requester. In order to proceed further on this, please ensure the following checks are done:
Try searching the email address on the global search bar.
If the search does not yield results, the email address is probably associated with a deleted requester. To find this, please navigate to Admin-->Requesters-->Deleted and check if the email address has been associated as a primary or secondary email to the requester profile.
If it exists, please restore the user and convert the requester to an agent.