A catalog cataset is not successfully created within a geodatabase when created through the Catalog pane if the database connection is made with a drive letter and is stored in the network drive.

Workaround

Create a catalog dataset directly through the Create Catalog Dataset geoprocessing tool, or connect to the file or enterprise geodatabase connection stored in a network drive as a Uniform Naming Convention (UNC) path when creating the catalog dataset through the Catalog pane.

Steps to Reproduce