@David Samuel Thank you for reaching out.
- Uncompress the folder where you want to install SQL Server. To do this, right-click on the folder and select Properties. In the Advanced tab, uncheck the Compress contents to save disk space option and click OK.
- If the above step doesn’t work, try uncompressing the parent folder as well.
- Please do also check the same issue on Stack Overflow https://stackoverflow.com/questions/72507438/sql-installation-error-directory-is-compressed-or-is-in-a-compressed-directory
Regards,
Oury