When a file sharing client connects to a server, an AppleTalk Filing Protocol (AFP) connection is established. To initiate this connection, the client queries the server using AppleTalk Session Protocol (ASP).
Personal File Sharing servers and early version of AppleShare 3.0 had an issue, where they could send a zero length reply to a ASP Get Status. The client would interpret this as the server not having an AFP that it understands. (The versions of AFP that the server supports is part of the data returned in the ASP Get Status reply.) The result is that the client posts the specified error message.
This issue was fixed in 1993. If this issue occurs repeatedly, using recent modern Mac OS, the suspicion would be that the server software has become corrupted in memory somehow. Turning Personal File Sharing off and then back on had been reported to clear up this situation.