currently you can only replace a layout with a layout that already exists.
I know I can go into design module create a layout with same name and the bug wil fix and then i can replace it, but that seems like a UX oversight.
imo it should be 1 error:
“layout X not found” would you like to select a different layout? yes, choose a layout.
I know its a small issue, but small UX things like this are what make software feel intuative and easy to use, or outdated and bulky.