Ok, consulting a Linux Phone guru friend of mine, we think we have made progress.
He’ not sure why the userdata partition was in a snapshotted state, but cancelling this should allow fastboot to overwrite it.
The command is ./fastboot snapshot-update cancel
but this won’t work because the Jolla supplied version of Fastboot in the Sailfish 4.4.0.64 zip file for the Xperia 10III is too old and does not support this command.
The solution is to download the latest version of the SDK platform tools for Android at SDK Platform Tools release notes | Android Developers, unzip it and use the later version of fastboot from there.
I’m now in the middle of flashing, having passed the original error by, so we’ll see how it goes!