I have followed all the steps from DEM_Update_MigZip - Samples - VMware {code}.
I can confirm that it works perfectly with profiles which are not backed up with One Drive.
In out environment One Drive is used for backing up users Desktop and Documents folders for example E:\user\username\OneDrive......\Desktop DEM creates archive (migration.zip) as described in Modernizing VDI for a New Horizon | VMware persistent disk migration part, but I think registries which are exported from old persistent machine are still pointing to this E:\ driver (Persistent Disk) and this causes the error message and users Desktop and Documents get corrupted.