This error occur in case you (or any extension) change a Label of the Variation.
For example, you list a Configurable product "Dress" with two options Size and Color. Initially, Color has two variations Red and Blue. Then, you change Red to Deep Red.
Since the Product in Magento is physically the same (only Title is changed), the SKU of the Product remains the same as well.
In case the Product didn't have any sale, M2E Pro successfully changes "Red" to "Deep Red" with the same SKU.
In case the Product had a sale, Variation cannot be deleted from eBay due to eBay restrictions. eBay does not allow to change Variation Data (e.g., title) in case it had a sale.
When Revising the Product M2E Pro sends the Same SKU on eBay, but with different Title. eBay returns error that this SKU already exists -> "Duplicated Custom Variation Label".
To solve the problem you should either stop the Product and list it anew or change Variation Title back to the old one.
Remember that you should not change Variations / Options Labels when the Product is listed as eBay has a list of restrictions in this regard and you are likely to face problems during revision.