The tool failed to create or alter the input geodataset's projection definition. The feature dataset may be locked by another application or user, or it may be read-only.
Make sure the dataset is not locked by closing other applications that may be using it or ensuring it is not being accessed by another user. If you are using a projection file (.prj) to define the projection, make sure it is formatted correctly. Finally, check that the output dataset is not read-only using the file system if working with a shapefile, raster, or geodataset in a local geodatabase. If working with an enterprise geodataset, check its permissions and change them accordingly.