Cannot create build sandbox from a project view

Hello Team,

1. One of the user is not able to create a build sandbox from a main project.

2. Steps followed : Create sandbox -> Sandbox path -> Project path -> Select build option -> Select respective revision number -> Click on Finish

3. I get an error window like : Failed to populate sandbox d:/sandbox/sandbox.pj MKS125212: The project file d:/project/project.pj is not registered as top level project with current server.

Note : On this particular subproject i see a ~ symbol on the folder. I have attached screenshot of these.

Should i take any actions with respect to this?

Kindly suggest a suitable solution.

Regards,

Vinayak