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The following was filed automatically by anaconda:
anaconda 13.21.32 exception report
Traceback (most recent call first):
  File "/usr/lib/anaconda/kickstart.py", line 729, in execute
    raise KickstartValueError, formatErrorMsg(self.lineno, msg="Specified nonexistent disk %s in partition command" % n)
  File "/usr/lib/anaconda/kickstart.py", line 1132, in execute
    obj.execute(self.anaconda)
  File "/usr/bin/anaconda", line 1058, in <module>
    ksdata.execute()
KickstartValueError: The following problem occurred on line 22 of the kickstart file:

Specified nonexistent disk sda in partition command

*** Bug 589525 has been marked as a duplicate of this bug. ***

Does sda exist?  Please attach /tmp/syslog and /tmp/storage.log.

This request was evaluated by Red Hat Product Management for inclusion in a Red
Hat Enterprise Linux major release.  Product Management has requested further
review of this request by Red Hat Engineering, for potential inclusion in a Red
Hat Enterprise Linux Major release.  This request is not yet committed for
inclusion.

Created attachment 412841 [details]
storage.log

No, sda doesn't exist.

Created attachment 412842 [details]
syslog

Then this is functioning as designed - kickstart is more strict now in what it will accept, and referring to a disk that does not exist is no longer accepted.

I understand thad installation shouldn't continue.
But problem is, that this is traceback and user shouldn't see any traceback.
Please correct me if I'm wrong.

It doesn't really matter here whether it's a traceback or not.  You still see the real error message, and the installation was going to halt right then anyway.  Functionally, there's no real difference between what you got and what you wanted to have.  I don't think there's really a need to work on handling that and redisplaying it in a slightly different format.