Unknown error: Access is denied. Check credentials and try again., Could not create folder 'xxxxxx' (4378208)

When migrating or provisioning Public Folders with On Demand Migration (ODM), you may encounter the following error:

Unknown error: Access is denied. Check credentials and try again., Could not create folder 'xxxxxxxx'. (Microsoft.Exchange.WebServices.Data.ServiceResponseException)

The folder in question may be at the root of the Public Folder structure, or it could be a subfolder that is attempting to be created in an already existing structure.

There are typically two scenarios in which you will encounter this error:

Scenario 1: First attempt to migrate Public Folders

1.) In the ODM Portal | <Project> | Public Folders | Dashboard | Configure Connections | Target, set the UPN of the target ODM migration service account that was used to grant consent to the target tenant:

2.) Create a new Public Folder mailbox in the target tenant if one does not already exist.

3.) Set ODM Public Folder migration service account (from step 1 above) as an Owner:

In addition, run a "Set Permissions" task first in your Public Folder project. This will set the necessary target owner permissions, in case it was missed. Even if it was manually done, please run a new task, as sometimes it resolves the issue, even if the owner permission is already in place. 

Scenario 2: This error is occurring when attempting to migrate new subfolders within a structure that already exists. 

1.) In the target tenant, navigate to the last Public Folder in the structure, where the new folder needs to be created. 

2.) Add the ODM migration service account as an Owner of this folder. 

For Example, if you are trying to migrate or provision this public folder:

\Public Folder1\SubFolder\New child folder

Then you will need to add the ODM service account as Owner on this Public Folder:

\Public Folder1\SubFolder

Public folders in Exchange Online do not automatically inherit permissions from the structure above. Please see this Microsoft article for details, as well as for example PowerShell scripts to recursively set Owner permissions throughout the Public Folder structure.