I tried the cases you described and a few more just to rule things out.
Snapshotting C:\foo\bar only, which doesn’t exist:
> restic backup "C:\foo\bar" --repo D:\restic --use-fs-snapshot C:\foo\bar does not exist, skipping
Fatal: all target directories/files do not exist
Snapshotting overrides.js only, which doesn’t exist:
> restic backup "$env:APPDATA\Mozilla\Firefox\Profiles\34b32ksm.drum\user-overrides.js" --repo D:\restic --use-fs-snapshot
C:\Users\al\AppData\Roaming\Mozilla\Firefox\Profiles\34b32ksm.drum\user-overrides.js does not exist, skipping
Fatal: all target directories/files do not exist
Note: Neither of the above commands even asked for a password.
Snapshotting C:\foo\bar and overrides.js, neither of which exist:
> restic backup "$env:APPDATA\Mozilla\Firefox\Profiles\34b32ksm.drum\user-overrides.js C:\foo\bar" --repo D:\restic --use-fs-snapshot
enter password for repository:
repository 16cdacef opened (version 2, compression level auto)
no parent snapshot found, will read all files
[0:00] 100.00% 5 / 5 index files loaded
VSS error: The caller does not have sufficient backup privileges or is not an administrator: E_ACCESSDENIED (0x80070005)
This time I was asked for a password and got the original error.
Snapshotting O:\artwork and O:\interior, both of which exist:
> restic backup "O:\artwork O:\interior" --repo D:\restic --use-fs-snapshot enter password for repository:
repository 16cdacef opened (version 2, compression level auto)
no parent snapshot found, will read all files
[0:00] 100.00% 5 / 5 index files loaded
VSS error: The caller does not have sufficient backup privileges or is not an administrator: E_ACCESSDENIED (0x80070005)
Snapshotting just O:\interior:
> restic backup "O:\interior" --repo D:\restic --use-fs-snapshot
enter password for repository:
repository 16cdacef opened (version 2, compression level auto)
no parent snapshot found, will read all files
[0:00] 100.00% 5 / 5 index files loaded
VSS error: The caller does not have sufficient backup privileges or is not an administrator: E_ACCESSDENIED (0x80070005)
So I got the same error regardless of whether none of the files exist, both of the files exist, or it’s a mix of both, except for when snapshotting a single directory which doesn’t exist.