I found this StackExchange thread - I tested and it works. Can't create Feature classes with the same name, even in different Datasets. I ended up appending my feature classes with an "_<number>" based on the iteration I was working on.
I don't know if this will fix your problem, but I had a similar issue and found that I have forgotten to give the extension of a file name. For example, I have asked the software to save a file with no extension like" .Shp or .Dbf.
I hope this helps.