I finally found a reference: Looks like for both SFTP and an external file system, it is possible. These are considered source. The link https://learn.microsoft.com/en-us/azure/data-factory/connector-file-system?tabs=data-factory shows both a file system and SFTP as supportable data sources.
https://learn.microsoft.com/en-us/azure/data-factory/connector-file-system?tabs=data-factory
https://learn.microsoft.com/en-us/azure/data-factory/connector-sftp?tabs=data-factory