Due to a problem in the Quartus® II software versions 12.1 SP1 and earlier, you may see this error when assigning pins in your design to a specific IO bank.
The error occurs if your set_location_assignment assignment includes wildcards that match internal logic in your design in addition to matching pin names. For example, this error can occur if you apply the following assignment where MDIO* matches the names of internal logic as well as top-level pin names:
set_location_assignment IOBANK_3C -to MDIO*
To avoid this problem, modify the assignment to only match top-level pin names.
This problem is fixed beginning with the Quartus II software version 13.0.