I got past this by deleting the databases that were previously created by SIF before it failed with a different error.
My issue was because I was setting up an XP0 instance, but the database server was a separate machine. SIF is assuming you installed SQL on the machine you're running SIF from. In my case, the machine running SIF had the DacFx stuff installed that's required from the documentation, but I also needed to install parts of the SQL Server Feature pack. Specifically SQLSysClrTypes (32 and 64 bit, which is called out in the docs) and PowerShellTools (32 and 64 bit, NOT called out in the docs)
If you don't have these, or just have the 64 bit versions, SIF will at some point fail and you'll have a bunch of partially created databases for xconnect. When you run SIF again you'll get the error you described. Log into the DB server and delete them manually and you'll get past this.