I was wanting the exact same thing and found this worked for me:
deactivate plugin (it will crash if you dont)
go to editing window for plugin for:
posts-in-page/lib/page_posts.php
add in
else :
$output .='<div class="empty">no posts available</div>';
right above
endif;
wp_reset_potsdata();
(so it becomes new line 39&40)
reactivate plugin
now you can also edit your css to the class ’emtpy’ to style the message if required.
Hope this helps.