Casual 
you can avoid this dialog, by find out which product is and deleting the sub key called SourceList 
ref HKEY_CLASSES_ROOT\Installer\Products
revised
looks that if the you delete this key
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Office
stop asking for diskette and the app is not working properly :) - possible solution for other applications.
origin - https://www.pipiscrew.com/?p=18365 msi-hell-with-insert-disk