I recently added swift files to my test target (combined with older cocoa touch classes).
Why is cocoapods complaining about the embedded content contains swift sett
I needed to add the $(inherited) flag to the build setting
If you replace YES with "$(inherited)" it will fix the issue in the project/target EMBEDDED_CONTENT_CONTAINS_SWIFT value. After you click Enter it will show a "YES". Run the pod install again and the issue should disappear.