This is common issue when using Dropbox/Box/OneDrive or another backup tool to synchronise your local folders since it prefixes large file paths.
As Robert suggests the best solution is to store all your Mendix projects at C:\Mendix.
Open Studio Pro > Open App > Locally from Disk > Select your .mpk > New Team Server > Specify the new project directory e.g. “C:\Mendix\Summerhill_Hospital_9_1_1_v2_Module6-main”
From this point onwards all newly created projects from v9.1.1 will default to C:\Mendix as your Mendix directory.
Are you attempting to use the package from within many nested folders, maybe with long filenames?
Are you able to move the package nearer the root of a drive like C: and then see if the problem still happens?
I tried several options to use the package from also very short file paths
So the problem is the default Mendix folder where it unzips the package into – during this process some files cannot be extracted due to too long files paths.
Hence I assume that I need to change the Mendix folder – which I do not know how to do?
Or the package itself contains very long file paths and hence makes it difficult to unzip