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If ArcGIS Desktop is set to use any metadata style other than the default 'Item Description' style, and if a geodatabase item is accessed from either the Database Connections or Database Servers folders, the metadata geoprocessing tools cannot be used to export the item's metadata or perform other tasks.
This problem affects the following tools:
The default path created in the Output File parameter for the Esri Metadata Translator, USGS MP Metadata Translator, and XSLT Transformation tools begins with 'Database Connections\'. This is not a valid file path in the computer's operating system; therefore, the output XML files are not created. The metadata model tools use these files as building blocks, and so they are also affected; their intermediate data is not created.
Copy the database connection to a local folder and access the geodatabase from that folder instead of from the Database Connections folder. For geodatabases accessed from the Database Servers folder, access the geodatabase from a database connection instead.