This error occurs when you try to add a hosted component to a design option without its host.
Error: An insert in a design option cannot be hosted by an element in the main model.
Issue: In order for a hosted component to be part of a design option, its host must also be part of the design option. The host cannot belong to the main model.
For example, you cannot add a window to a design option unless the host wall is also part of the design option. You cannot add a skylight to a design option unless the host roof is also part of the design option.
The error can also appear when you try to move a hosted component from the main model to a design option without its host.
Solution: To resolve the issue, move the host element to the design option. Then you will be able to add the hosted component to the design option.
If you later incorporate the selected design option into the main model, the host element again becomes part of the main model.