This error may be caused by an Advanced Installer limitation regarding the file extraction.
Currently, the .EXE setup files built with Advanced Installer extract the embedded files (MSI, CAB, etc) asynchronously during the Wizard Dialogs stage to improve the installation time. Our old method was to extract the files at the very beginning of the installation, before the UI dialogs appear.
Can you please try to set the "ExtractFilesFirst" property to "1" in "Install Parameters" page, rebuild the project and see if that helps? This way, the old extraction method will be used.