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Try this:
https://www.reddit.com/r/Torchlight/comments/107cwo/unable_to_get_local_appdata_folder_can_anyone/
https://support.arcgames.com/app/answers/detail/a_id/4938/~/error-message%3A-unable-to-get-local-appdata-folder
Apparently it's an issue with "Folder Redirection".
https://social.technet.microsoft.com/Forums/windows/en-US/ecd6044d-8169-4a17-b7ca-02b9c9855a6b/folder-redirection-issue?forum=winserverGP
Everywhere I search it always brings up this issue with domains and servers for users.
on my end, it was windows defender's Controlled Folder Access. i had to allow torchlight2.exe and modlauncher.exe through controlled folder access and had the issue resolved. ;)