Delete the SQL instance:

sqllocaldb stop MSSQLLocalDB
sqllocaldb delete MSSQLLocalDB

Now delete the database files:

%USERPROFILE%\AzureStorageEmulatorDb*.mdf
%USERPROFILE%\AzureStorageEmulatorDb*.ldf

Finally, recreate the sql instance:

sqllocaldb start MSSQLLocalDB

Sources

https://social.technet.microsoft.com/Forums/en-US/e5543bd7-4e09-43fb-a272-26c85299bcd8/microsoft-azure-storage-emulator-v41-error?forum=windowsazuredata