I am doing a fresh install of ArcGIS Desktop and am getting this as well. I believe it is because I am installing it on a machine which already has ArcGIS Server 10.4.1 on it. I want to limit the amount of machines in this small test environment so I don't want another machine in the mix. Not sure how to proceed here either.
Shawn, are you trying to put a Desktop 10.2.x on a machine with ArcGIS Server 10.4.x, or are you having issues installing Desktop 10.4.x on the machine? Because this thread is several years old (and referring to 10.2.x), just wanted to clarify.
Because there may be shared libraries between Desktop and Server, it is highly recommended (and maybe mandatory) that the same version are installed.
Get started with ArcMap—Help | ArcGIS Desktop
Typically the install will let you know if there is older software that will need to be removed, but it may not know how to handle if you try to put older software on a machine with a new version already installed.