How to resolve this

Hi Pyatta, the error message in the screenshot indicates that a muting permission set with the same Label/API Name already exists. 

Please go to Setup → Permission Set Groups → Sales User → Muting Permission Sets and check whether Sales User Muted already exists. If it does, you don't need to create it again—continue with the existing muting permission set and follow the remaining steps in the challenge.  

If you don't see it there, please provide the name/link of the Trailhead challenge you're working on so we can check the expected configuration.