I have the same, I changed nothing, not moved a thing. I removed the folder from BTSync, added again, still the same message. Windows Phone 8.1, BT Sync BETA Version: 18.104.22.168.
I got it to do backup, which is nice, waiting for support for video and full resolution. I added another folder to sync which I planned on having music in, so I can sync the music to my phone when I want it more easily. The files synced, but I can't find them on my phone except for with the BTSync app, and there I can only play one file at a time, so that's a problem. Does anyone have any idea where I can find the files?