@MJ Thanks for posting in our Q&A.
For this issue, it is suggested to try to set a URL that hosts the wallpaper. See official docs - https://learn.microsoft.com/en-us/mem/intune/configuration/device-restrictions-windows-10#personalization
Or you can upload it to Azure storage like https://msendpointmgr.com/2021/02/02/manage-desktop-wallpaper-with-microsoft-intune/ or https://oliverkieselbach.com/2021/02/23/set-preference-for-a-suitable-wallpaper-with-intune/
Hope it will give you some ideas.
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