How do you remove the email notification pop up from a software simulation in Captivate 2017?

Assuming you don't have Photoshop:

The easiest way to hide the pop up in a Recorded Software Simulation is to place a shape of the same colour as the background over the pop-u  (that really is what the pop-up remover is doing in a video recording.)

You can also merge the the shape into the background.

Since your background has a border, another approach would be to simply make a copy of a another background where the pop-up was not visible, crop the area in Captivate that would correspond to the area of the pop-up, over- lay and align it on the background over the pop-up and merge into background.

All else fails take it into Photoshop - assuming you have it.

Can you show us a screenshot of this notification popup?

Is there some point in your project where an Event is executing a Send Email action?  Perhaps On Slide Enter or at the click of a button?