I’m not convinced it’s a timeout causing the issue (they don’t usually manifest during the “test connection” call), but if you are you using a Canary version of Duplicati this post mentions a --http-operation-timeout parameter you can test to set the number of minutes before it times out (default is 10) and see if the error goes away.
And if you’re using Backblaze (B2) as your destination, you could look at the --b2-page-size parameter to lower the number of files returned in each request (I’m not sure what the default is for that).
Actually, since we know the default timeout is 10 minutes you should be able to view the logs and see if this step is taking 10 minutes before it errors out…
Oh, and I edited your post to make the error message a little easier to read (just add ~~~ before and after the text).