The error is TF203028: You cannot create a branch at $serverPath because a branch already exists at $SubFolderServerPath.
You can fix this by converting this sub folder back to folder (as you can't have a branch inside a branch)
You might however don't see any such branch folder.
In this case - just set Visual Studio to show deleted items in Team Explorer.
Then you will be able to convert this sub folder into a folder - which will fix the problem