If you're getting the "Your OneDrive folder can't be created in the location you selected" message is because you're configuring the sync client with FAT32 or exFAT file system, which seems that they're no longer supported file systems with new version of OneDrive for PC starting with the Windows 10 Fall Creators Update.
To prevent getting this error, you must set up the OneDrive sync client on a drive formatted with NTFS.
In the case, you come across this problem, you can move the data on the drive to another storage, and then do the following:
- Open File Explorer.
- On "This PC," right-click the drive it's not supported, and click Format.
- Under "File System," select NTFS.
- Check the Quick Format option.
- Click Start.
Once the drive is formatted using NTFS, restore the data, and the try to set up OneDrive again.