@Raj Welcome to Microsoft Q&A Forum, Thank you for posting your query here!
Based on the error message Server endpoint creation fails, with this error: (Error code: 0x80070002) This error occurs if the server endpoint path specified is not valid. Verify the server endpoint path specified is a locally attached NTFS volume. Note, Azure File Sync does not support mapped drives as a server endpoint path.
You may also refer here How to add a server endpoint and also check that you have the latest Azure File sync agent
Based on the error message, please refer to this article: https://github.com/MicrosoftDocs/SupportArticles-docs/blob/main/support/azure/azure-storage/files/file-sync/file-sync-troubleshoot-sync-group-management.md
Additional information :Troubleshoot Azure File Sync
Hope this helps! Kindly let us know if the above helps or you need further assistance on this issue.
Please do not forget to "Accept the answer” and “up-vote” wherever the information provided helps you, this can be beneficial to other community members.