Hello, and thank you for reaching out to Microsoft Q&A.
During the system reset process, Windows extracts the system image, creates temporary setup files, and builds a new Windows installation folder. If you don’t have enough storage to hold these temporary files, you may not be able to complete the factory reset. You typically need at least 15–30 GB (and in some cases up to 40 GB) of free space on your local drive.
If you can share the total disk size of your device, I can help you free up some space.
However, if your device has limited storage, such as a 64 GB drive or minimum that is almost completely full, your only option might be to perform a clean reinstallation using a USB installation media drive.
For reference, see
https://www.microsoft.com/en-us/windowsinsider/cleaninstall