What does this error mean?
This is a direct error from eBay saying that variations can't be added to a listing that is already published without variations.
Why can't we change non-variation listings to variations?
When a listing is published, eBay assigns a special Item ID to the item to signal if it is a variation or non-variation listing.
Because of technical reasons at eBay, Item IDs can't be changed from variation to non-variation (and vise versa).
How to fix:
Because eBay does not allow changing the Item ID, you will currently need to:
End the listing.
Edit the item to include variations (in the "Ended" folder of Listings),
Relist with variations.