This issue may be caused by the Temporary storage on the local computer is too low.
In %appData%\Microsoft (most likely on C-Drive), Migration manager creates a folder named "MigrationToolStorage" to save the blobs or temporary data whilst it scans & uploads etc.
You could try to run following commands to create a link to a different storage with more space.
cd %appdata%\Microsoft
mklink /J MigrationToolStorage Z:\SomeOtherFolder
Reference:
https://sharepains.com/2021/08/27/migrating-file-shares-with-sharepoint-migration-manager/
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