@x20011I got that message the first time I tried to install desktop, pixel or the raspberry OS or whatever you want to call it, from retropie.
Fixed by re-burning the retopie image, Installing the Safe Shutdown and OSD Software on the PiBoy DMG.
After this I installed pixel and it worked.
But all this in my model 4.

If by "Arcade Mode" you mean EmulationStation then:
Pressing F4 will exit EmulationStation and drop you to the Terminal. Or you could use the ES main menu by pressing "Start" and selecting "Quit" and then "Quit EmulationStation".

If you bought a custom premade image then I have no idea what software you're using and only the original seller can help you,

@BuZz I didn't copy anything on my 4.6 fresh install. Permission issue arose immediately. Of course I should be able to fix with chown.