Description
When publishing a precreated service definition file (.sd) with Manager (or by right-clicking a service definition file using ArcGIS Desktop) you can change specific configuration properties. For example, you can change the service folder or service name. This generates a separate configuration "overwrite" that is sent as a publish parameter to the server. The server-side publishing tool returns this error when it can't deserialize that configuration overwrite.
This server system tool is invoked by the publishing client (Manager or ArcGIS Desktop) when you create a service.
Solution
Publish without the change to the configuration properties. If you want to make changes to the configuration properties, you may have to re-create the service definition file (.sd) file using ArcGIS Desktop.
Learn more about creating a service definition in ArcGIS Desktop