It really means you can't change an already-approved free version of your add-on to paid. The process for changing a free add-on to paid is simply to publish a new version of it which you designate as paid; if all the previous versions were free, that will trigger the add-on approval process (same as if the add-on were brand new) so the new version will not be visible until we've reviewed it, but once it's approved you can continue to release new paid versions with no further intervention. The older free versions will still be there if someone wants to download and use them, but the main page for the add-on will show the current version.
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In most cases you should not need to create a new add-on. This might be a bug, or maybe I'm just unclear on your situation. Could you please create a support issue here so we can look into it in more detail? https://ecosystem.atlassian.net/projects/AMKT
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