I believe this error comes from the fact that you are working from a Onedrive synced folder.
Can you try running rmarkdown::render() in R console to see if this comes from RStudio IDE ?
Basically, the error here means that the template file that is supposed to be used by rmarkdown is not found whereas it is supposed to be in package installation folder (your R library).
Using a synced folder is known to create some issue but not always. There is also a # in your folder path but I don't think this is what is causing the issue.
Can you try the above in R console or outside RStudio ?
Can you try deactivate the syncing of One Drive ? (it can create conflicts during file access maybe)