<em> the@email.com</em> is already in use.  Have you forgotten your password?".

function MYMODULE_services_request_postprocess_alter($controller, $args, &$result) {
  if (isset($result['form_errors'])) {
    array_walk($result['form_errors'], function(&$error) {
      $error = strip_tags($error);
    });
  }
}

$mainMessage = "<em> the@email.com</em> is already in use.  Have you forgotten your password?";
$rendered_message = DrupalCoreRenderMarkup::create($mainMessage);
drupal_set_message($rendered_message);