Normally you should be able to remove Bitlocker encrypted partitions through this menu, but perhaps it's being a bit stubborn. Let's try this instead. [br]
Instead of clicking the install Windows options in the Windows installer menu, click repair your computer instead. From here click Advanced options and get to a Command. Hopefully it will not prompt you for any passwords or keys as part of this process. it usually doesn't when you're doing so from USB media, I never know. Once it opens, type ``diskpart`` and press enter.
Once your the computer launches diskpart in the command line window you'll get the diskpart> prompt.
Enter ``list disk`` The command will output a list of the current disks connected to the machine, including your USB drive. Your boot disk will probably be disk0, but whichever disk it is select that disk by typing ``select disk N`` where N is the number of your internal disk in the output.
I might try typing ``clean`` here, and see if that alone works, but it may not. If it doesn't you can select the individual partition and delete that by typing ``list partition`` then ``select partition N`` in the same way you did for the disk, where N is partition number you want to delete. Then type ``delete partition override``. If you don't get any errors, type exit, restart the computer back into your install USB and see if that helped.