I'm seeing this problem too. It happens with Documents and Desktop when they appear in the Finder sidebar.
When I look at the file system, Finder shows me "Documents - <computer name>". And similarly, "Desktop - <computer name>".
I can navigate directly to these folders in Finder, but I can't get to either of them using the links in the sidebar.
Looking at the file system in Terminal, I see that "Documents" is symlinked to "Documents - <computer>". However, if I try to cd to "Documents", I get this message:
cd: too many levels of symbolic links: Documents
I have not done anything with either of these two folders myself. Could it be the result of a recent update? I'm running Ventura 13.5.
Edit: I noticed that "Documents" isn't symlinked to "Documents - <computer>". It is symlinked to "Users/<me>/Documents". So it has become a circular link. Desktop is the same.