Q: itunes backup problem

did you try this? If your iTunes backup couldn't be completed or you can't restore from a backup - Apple Support

When you say there is more than 400GB free, do you mean on disk C: for both computers?

Are you running antivirus software on this computer? It may be blocking the request to allocate space, with iTunes delivering a misleading error message because the programmers didn't consider other reasons why the call might fail.

tt2