Welcome to the forum @Califauna
Thank you for the exact message. As this is not a Windows forum, it helps people research the issue.
You are probably using Encrypting File System (EFS) (Wikipedia) where access is easy for your user, however blocked for others including the powerful LocalSystem user. Presumably this is as intended.
Multiple-user (shared) access to encrypted files (on a file-by-file basis) and revocation checking on certificates used when sharing encrypted files
is said to be available since Windows XP, so perhaps that’s what you tried, but didn’t quote the dialog. Possibly you can research that yourself using a web search if you really want access for another user.
The default user would be SYSTEM, however you can probably change it to you, if its suits you needs.
Duplicati.WindowsService.exe also offers
Supported options for the install command:
/localuser
Installs the service as a local user.
although I’m not sure how well that handles the password, if Windows user is password-protected.
As Duplicati databases are by default in %LOCALAPPDATA%\Duplicati (including for SYSTEM, so C:\Windows\System32\config\systemprofile\AppData\Local\Duplicati), changing user is somewhat awkward, as files need to be moved or adjusted, unless you just want to start over new.
Migrating from User to Service install on Windows gives a procedure that you could use in reverse.
Before going too far, you should look at About → System info → UserName to confirm current user.
How do I let the SYSTEM account use EFS encryption? is a page I found if you prefer that method.
A question in all cases is what will happen during Duplicati restore. Even if access can be acquired, there’s no EFS-specific information in the backup that Duplicati can use to add encryption as-it-was.