I just got mine and was having a similar issue. I think you just have to keep the power off on the Motion Controller until that step of the process. Once it asks to turn it on, that's when you do it.
Hi there. Thank you for reaching out and we're sorry for the trouble that this has caused. Can you please confirm what version of the DJI Virtual Flight app are you currently using? Are you using the PC version or the Android/iOS version? Please keep us posted. Thank you.
The IOS App Store says the download is version 1.4.2 but when I look at the Upload Notes in the download it says it’s version 1.3.2. It does not connect with the Motion Controller.