since the release of the latest software patch for the game that splits up the game client for US and EU alot of us have been getting this annoying error. Some can't get the game properly installed because of it, others get it downloaded and installed but still have the annoying popup when starting up the launcher even if they're able to start the game.
1. on the drive where you chose to install the game (and thus find the Zenimax folder) temporarily move away (copy it to another volume and then delete it on the drive where ESO is installed) data that does not belong to the ESO client to another drive until you reach at least 60GB of total free space on the drive where ESO is installed.
2. Start the launcher to let it auto-create the missing virtual directory (as soon as it works you'll know because it simply won't show the error anymore)
3. Move/copy back the data that you temporarily moved away to another drive back to the drive where ESO is installed
Deeper explanation for those that are interested:
After the patch, their structure for the EU client still requires the folder named "The Elder scrolls online" to still be present right next to it because it's still being hardreferenced in the code so Zenimax applied the trick to have this previous folder still available but only as a pointer to the new EU folder instead of holding the real files. This means that the "The Elder scrolls online" folder will show in windows show about 21GB of data in size (=the previous size) while in reality that folder only has 18MB size on disk.
At every startup of the launcher it will check if the original directory "The Elder scrolls online" is present, even if it's a virtual one. More even, it will check for an amount of free space for the entire virtual size of the Zenimax folder being the the sum of both folders (the EU one with the actual data and the virtual one claiming to be 21GB in size) for about 60GB of virtual space in total even though in reality it only requires about 30GB of size on Disk. Hence, as long as you do not have 60GB of free space on that drive at least 1 time so the game can create that second virtual folder the launcher wil keep showing that error. As soon however as it is correctly present through whatever way (either temporarily freeing up space so the launcher can auto create it or through manual operation) it's check will see that all is in place, even if it's not required to start up the EU game
There you go, hope that clarifies it for you