This has not been fixed. I just received the same error multiple times while publishing/republishing a dynamic map service from ArcMap10.2.2. Followed by "Unable to process request. Service not found.", however the REST map service appears to be functioning normally.
I just replied to something similar. Depending on your network envrionment and site architecture, map services with many layers, other complexities or that are under load can still hang at overwrite when specifing 0 minimum pooling instances.
But at 10.3, a .glock is not left behind on the service at overwrite failure so you should be able to go right back in, maybe perform a service restart and then you should get a clean overwrite. At least that's been my experience thus far.
I am also having this problem. I get the message:
|Method failed.HRESULT = 0x80070057 : The parameter is incorrect. .|
And the effect is that the subtypes of my service won't show (only the database code appears, which is a problem for my webmap users).
What is the problem and how can I solve it?