Still getting this error even when AutoUseSystemTempFolder is set to true

It just doesn't seem that it is trying to write to the temp folder from the path below,

please note that it does work on the local machine however it doesn't work on the server.

Access to the path
C:\InetPub\Test\uploading.93df8df9-4941-4fa9-818e-f844a7b457c1.filename,rtf.resc is denied
Click ok tp resume the file

 

Thanks