This is potentially nitpicking. But I see the problem repeated among everyone who tries to do it.
Migrating the assets to “a content folder” is not the same as migrating to “THE content folder.”
Everyone I’ve seen do this just makes a content folder under the one that exists, and then the references break because they tried to put the assets all in one folder under another folder, under another folder that is a content folder.
I think the expected behavior is that it would gather everything I need and give me the option to stick it all in one folder so that none of the assets “leak” into other similar paths.
It took me a couple hours to realize i had to specifically choose the content directory itself, not just “a directory” because the error doesn’t say “This is not the base content folder as specified by the engine path.”
Additionally, and I don’t know if this is a problem or not, but I think not automatically cleaning up the references for the migration might be a problem.
Just a thought as I untangle this hairball migration.