This issue is fully related to the fact you have you Mx project in a folder, which is a sub-folder of a sub-folder of…. and in combination with a longer project name, Microsoft OS cannot deal with such long path.
Having MX projects in OneDrive results in longer paths with a bigger change of these issues. But even if you could check it out locally in a OneDrive synced folder you will have bigger problems. The Mendix repository is build on to of SVN (or Git) which is versioned. Just like that OneDrive is versioned. Checking out a versioned-synced w/ cloud server folder into a versioned-synced w/other cloud will cause that the sync with the Mendix cloud repository will break.
Never checkout models in a OneDrive folder. best way to go if you have your whole MS account synced with OneDrive, is to create a Mendix dedicated folder in the root of your harddrive. Personally I will never sync “My documents” with OneDrive, so that I’m in control of my local files.
OneDrive is notorious for these kind of problems. I moved my Mendix folder out of OneDrive's reach and store my app projects directly on the C drive now.