Issue with adding common code as git submodule: “already exists in the index”

I’m new to git and would appreciate help with adding submodules.
I’ve received two projects sharing some common code. The shared code was just copied into the two projects. I created a separate git repo for the common code and removed it from the projects with the plan to add it as a git submodule.

I used the path option of git submodule add to specify the folder:

git submodule add url_to_repo projectfolder

but then got the error:

'projectfolder' already exists in the index"

This is the desired structure of my repository:

repo
|-- projectfolder
    |-- folder with common code

It is possible to add the git submodule directly in the repo, or into a new folder there, but not in the project folder. The problem is that it really need to be in the project folder..
What can I do about this and what have I misunderstood about the path option of git submodule add?

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