I tried to do this for over 1 month and tried on 2 computers, both fail, do not know why

After 2021.1 is installed, I open the company, and it asked me to convert data to a new version. However, when I click OK, it said my Disk Space is not enough. I have tons of disk space.

I also tried to copy data to local drive like C or D, all failed. Tried retore backup from 2021.1, also failed. Any work around?