We would get this exception if we try updating an Activated Workflow using Update Request.
So basically, if we need to update the activated\published workflow i.e. Activate or Deactivate it or change the Owner of the workflow, we would need to use the SetState and Assign Request. If we try doing it using the UpdateRequest we will the above error message.
Also, we noticed that if we try changing the state from Deactivated to Activated through Update Request, it will not change the State to Activated and it will not throw an exception as well.
However, if we use Update to Change the Owner for the deactivated workflow, it works fine.
Hope it helps..