Here's what worked for me on Windows 11:
(1) Delete the windows subfolder "iCloud Photos" in the windows "Pictures" folder.
(2) Re-setup iCloud for Windows.
Note: The Pictures folder is usually on your C:\ drive (e.g., C:\Users\SomeUser\Pictures) or may be on another drive, depending how you setup windows on your PC. Do NOT delete the "Pictures" folder, just the subfolder "iCloud Photos". Do NOT delete any other subfolders in the Pictures folder.
Note: There may be photos in your iCloud Photos subfolder that were downloaded before the error cropped up (these will be deleted when the subfolder is deleted). Once the error is corrected, all your current photos in iCloud will be re-downloaded into the new iCloud Photos subfolder that iCloud will create when it is re-setup.
Note: the above solution worked for me after trying all the other basic recommendations such as rebooting PC, shut down and restart PC, repairing, uninstalling and reinstalling iCloud for Windows, selecting various alternative options in iCloud for Windows setup, etc. None of those attempts to fix worked and the same problem persisted (error message: "iCloud Photos failed to archive existing files in D:\Pictures\iCloud Photos\Photos [your folder location may vary] and cannot start. Please restart your computer"). Before the error showed up for apparently no reason (nothing new installed or updated), iCloud Photos was working fine. After deleting iCloud Photos folder and re-running iCloud setup, now working fine again.
Hope that helps.