The same installer was able to upgrade an El Cap VM to Sierra, so the installer is good.
This problem is likely because the DMG is mounted and we're asking to mount it again.
Easy fix, try one of the three:
- Reboot the Mac
- Use the command line:
hdiutil detach /Volumes/Mac \OS \X \Install
- Use Disk Utility to unmount the volume
Hope that helps!
It was called "OS X Install ESD" and ejecting it fixed the problem.