000163 : Linked feature class must reside in the same place as output

Description

The linked feature class must reside in the same geodatabase as the imported annotation in order to be linked.

Solution

Import the annotation into the same geodatabase where the linked feature class resides or move the linked feature class to the geodatabase where the annotation will be imported to by copying and pasting the linked feature class to the geodatabase you are importing to, or using the Copy Features tool to move the features to be linked to.