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The simplest solution I've found to this problem involves changing the exact way you tell Alteryx to connect to the file. When I would try to paste the path of the file into the Input Data tool in the Connect a File or Database box, I would get this error.
Instead do this:
1. Click the Input Data dropdown,
2. On the Data connections window, select Files on the left side
3. Drag and drop the file to the Select a File space.
After you release it to that space, you should see the Data connections disappear and the Select Excel Input window appear. If it does, you're good to go. Somehow Alteryx Designer doesn't like the path paste method, but luckily there was an easy workaround for me. Hope it works for you too!