Hi Sai, seems to me that it indicates the System Reserved or EFI partition is too small or lacks free space, which blocks the upgrade to Windows 11. You can confirm this in diskmgmt.msc; if the System Reserved or EFI System Partition is under ~500 MB or nearly full, the upgrade will fail with this exact message. The supported fix is to extend the EFI/System Reserved partition by shrinking the adjacent OS partition and increasing the system partition to ~500–600 MB using Disk Management or enterprise tools.
If the laptop is managed by corporate imaging, coordinate with the IT deployment team because modifying the boot partition may be restricted by policy or BitLocker protection.
I hope it's helpful. If it is, please give it a thump up or an accept answer, appreciate it :)
Harry.