"System Restore failed to extract the file (...\OneDrive) from the restore point."

Pedro, you seem to have absolutely no grasp of this issue. Perhaps you ought to bow out and give someone with the actual solution an opportunity to weigh in?  jaygourley, who is the one with this issue (same as I have) seems to understand better than you do, and has already availed himself of the obvious solution sets.

jaygourley, I am in a world of hurt, here. I am seeking to accomplish this system restore because of some recent (last few days) system event - probably a recent update from MS or another of my software packages - causing my Powerpoint to crash, constantly. Since this has never happened before the past few days, and I use Powerpoint as often as several times daily, it's not a fluke. AND, like you, in the past (as in, before my computer was tied to OneDrive, ...ugh), I have had zero issues using System Restore points.

Does ANYONE out there have a clue as to how to dissociate OneDrive ling enough for jaygourley and I to perform a system restore??? Help???

Hi everyone. 

I'm getting this too.

Windows Restore shouldn't be looking at that folder in the first place, as system restore is supposed to ignore user document folders (and this is a cloud drive that is backed up online). 

As far as I can figure, the accidental inclusion of this special folder makes the automatic restoration impossible.

If the reason you are trying to restore is to get some specific overwritten files out of the restore point, you can use System Restore Explorer described here (works great on Windows 10:

https://www.howtogeek.com/76212/how-to-mount-a-system-restore-point-to-restore-a-single-file/

While you are in there, you will notice that the OneDrive folder is, in fact, being monitored. In theory, you can add "c:/Onedrive" to the ignored list for future restore points, which should make Windows restore work properly from today (on new restore points) but does not make old restore points usable.

https://tweaks.com/windows/37472/exclude-specific-folders-from-system-restore-backup/

Also..in theory, if one could modify the shadow copy (the Explorer wisely mounts them read-only) to remove the offending folder, it shouldn't try to replace it when you do the restore. Of course, I would make several copies of my Onedrive Data first if I was able to do so.

I've had this problem with system restore for as long as I can remember with Windows 10, and have had to reinstall windows from USBbecause this problem has actually prevented Windows 10 reset from working too!

Microsoft Windows has this nice functionality to protect you when Windows dies, but you can't use it if you are using Microsoft cloud software.

Good job MS and what do your QA and testing teams actually do ?

I don't understand why it's even failing as its "users" folder so should be data, except that now even MS programs/software gets installed into this location due to UAC.

Of course installing new software will create an automatic restore point that wont work because it won't disable one drive nor prompt you. 

On the plus side, once you have a USB image, it only takes half hour to install.

apaolle, these forums can help sometimes.  At other times when there is no response from MIcrosoft I tend to believe that there is no current fix for this issue.  The only thing I am doing now is to try to be as careful as I can so as not to require any restore, as I can't  do it.