I have 2 separate questions.
1. We created a Power BI report through Desktop App and published it to the web server. We want to unpublish it but we can't find the option to do so. How should we do it?
2. We created a test report that is provided by Power BI services. We deleted the Test report, but we are unable to delete the dataset because we did not unpublish the report. How should we handle this?
To unpublish something from the Desktop, you delete the dataset on the service. It will remove the report and related dashboard object, if any.
To delete a dataset in an app, you need to remove it from the app, or delete the app, then remove the dataset.
You cannot delete/unpublish from the desktop app. Has to be done on the service.
That's the limit of my knowledge on this. I've never seen that error. It seems you have this report published/linked somewhere that the service is tracking.
Do you have another report in the same workspace using that dataset? Or even stranger, an Excel workbook in the service that is linked to this report through the Analyze in Excel feature?