I got that effect when I went from /e/OS based on Android 11 to /e/OS based on Android 12. It looks like something changed with the encryption and TWRP can’t handle it yet.
I don’t know whether that’s something that would be done with a “normal” update within the same Android version. Perhaps it’s not the same issue even if it looks the same.
Anyway … TWRP can use a micro SD card set to be used as external/portable storage (always!) or you could try whether TWRP can use a USB Stick via a USB OTG adapter.