Eclipse - "path/to/project" overlaps the location of another project: "your project"

Sometimes in eclipse we want to open a project that can't be imported because it still doesn't have Eclipse's configuration files (.project file)
The thing is we want to put it in ou workspace and then click on File >> New >> Java Project 
Then we uncheck the "Use default location" box and select our project folder in the workspace and there comes the surprise:

This beautiful small error message. I've recently found out how to deal with it and it's definitely not intuitive.
To avoid it, create the project as you would before (using  File >> New >> Java Project ) but leave "Use default location" checked and in the Project Name field use the name of the folder you put in your workspace. It's going to create the project without complaints and use your existing code.