Changing key storage root returns error. Folder not found


I’m in need to change the Storage root for my encryption keys as my Data and the rest of the Nextcloud folders are on two separate logical volumes. This causes issue with the encryption app. I remember I solved it in the past by creating a new folder in the Nextcloud/ directory and pointing it as my storage root for encryption keys.

However, when I try to do this now it only returns the following message:

The folder exists, and here is the current permissions for it:

I don’t see why it is returning this error. Can someone advise?