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Hi Al,
In case a solution was never found, I recently came across this behavior as well, identified the cause, and fixed it. I'm putting the solution here in case anyone else comes across this problem:
For reasons I forget, I added "+xmp" to the "Additional File Extensions to copy/move with file" field under Copy/Move/Reject. This causes the "Unable to create a temporary file" error. In my case, removing "+xmp" fixed the problem.