SharePoint or OneDrive Backup fails with 'Cannot complete this action'

A backup attempt for SharePoint Online and OneDrive objects may fail with the following message:

Cannot complete this action. Please try again. Total count of failed items: N

Underlying Error:

Server error of type Microsoft.SharePoint.SPException occurred: (-2147467259) Cannot complete this action.

After review with Microsoft Support, it was confirmed that affected tenants may encounter this issue, as described in event OD1177143 on the Service Health Dashboard in the Microsoft 365 admin center.

Direct Access Link:
Service Health Dashboard - OD1177143

Microsoft is actively developing a solution to address this issue. The estimated delivery timeline can be tracked via events OD1177143 and SP1177145 in the Microsoft 365 admin center.

According to the latest update from Microsoft, a fix has been deployed to address the underlying issue, which will prevent additional folders, files, and list items from being impacted. For items currently impacted, Microsoft has deployed an automated process to resolve the issue. Microsoft's validation of the automated repair process is ongoing. Please refer to service health events OD1177143 and SP1177145 in the Microsoft 365 admin center for the latest updates.

If your organization is experiencing this backup issue, please contact Microsoft Support for clarification on timelines and possible workaround options.