This will happen with any Mac OS compatible computer having had System 7.5.3 Revision 2 installed on it.
Workaround
Use the System 7.5 Update 2.0 installer, and preform a custom installation of System 7.5.2 Update (under the System option). Then use the System 7.5.3 Revision 2 installer.
On computers which came with System 7.5.3 preinstalled (PCI Power Macintosh 7200/120, 7600/120, 8500/132/150, 9500/132/150) the System suitcase must be reinstalled before Revision 2 will reinstall. Therefore reinstall the original System software which came with the computer.