I have seen the same bug a while ago in the itch beta, and now that code is in production. I should have told Amos...
Anyway, is your home directory/itch directory mounted via FUSE or eCryptFS?
Viewing post in Problem installing some games on Linux
I admit i'm not entirely sure how to check which of those is mounting it. The directory is in a NTFS partition mounted by /etc/fstab - the relevant line is here:
UUID=1646E9926F0B62FE /home/jen/Media ntfs rw,auto,users,exec,nls=utf8,umask=003,gid=46,uid=1000 0 0
Interestingly, I have been able to install games in my home folder (~/.config/itch/apps), which is in the same ext4 partition as the root directory. From this I have gotten a hacky solution to this issue where I install it into the home install folder and then just cut+paste the files over to the other partition, from which I can still run the game but obviously will cause complications down the line if anything ever needs updates.
I'm pretty sure I know what causes the bug, and it's that this https://github.com/detailyang/go-fallocate/blob/master/fallocate_linux.go library that butler uses since the last revision doesn't implement the behaviour of posix_fallocate from libc.
Your use of NTFS is another case in point, fallocate probably fails. Either Amos fixes this in butler/ox, or we make a feature request in go-fallocate, or the linux NTFS drivers implement fallocate. I'll file a bug report in ox and go-fallocate now.
A **super hacky** workaround is downloading an old butler v15.17 binary from here: https://broth.itch.ovh/butler and replacing the butler binary in your itch installation. What makes it **super hacky** is you need to overwrite the v15.18 binary to trick itch into thinking you have the latest butler version, otherwise itch will update from 15.17 to 15.18 again and overwrite the binary that works. Well, if this is fixed in 15.19, itch will think you're on 15.18 and overwrite the hacky workaround, so it won't mess up your itch installation for eternity, I think. Only do this if you know what you're doing.
My butler binary was at
~/.config/itch/broth/butler/versions/15.18.0/butler