Platform by design is to have unique Platform Space names. There cannot be any duplicate spaces of the exact name throughout Platform.
Scenario 1. If you are trying to add an existing space and this error pops up, check all storagegroups if this space already exists. If there is a space of the same name, then you must either use that space if it's already existing or create a space with a different name.
Scenario 2. If you are creating a new space and this error appears, the space likely exists on the storagegroup and it was removed in the past. You must use the Add Existing Platform Space function instead.
Scenario 3. If you have verified that this space does not live on either Platform UI nor Windows File Explorer of the Storage Group, we will have to remove the space manually out of SQL. This requires a Promax Tech to look into with development to remove this space out of the database.