That message is probably from ffmpeg failing before it even starts encoding. Since you are using CPU transcoding, it is either a permissions issue with the output directory or the disk is full or something.
Jellyfin 10.10.6 (Docker)
Ubuntu 24.04.2 LTS w/HWE
Intel i3 12100
Intel Arc A380
OS drive - SK Hynix P41 1TB
Storage
4x WD Red Pro 6TB CMR in RAIDZ1