According to the description[1]

Whether to ignore when (trying to list files in directories or when downloading a file), which does not exist or due to permission error. By default when a directory or file does not exists or insufficient permission, then an exception is thrown. Setting this option to true allows to ignore that instead.

when the `sftp_ignore_file_not_found_or_permission_error` option is set to `false` (by default) and the folder (set in `sftp_directory_name`) doesn't exist, the connector should throw an exception.
However, if the folder doesn't exist, the connector creates it instead.

[1] - https://github.com/apache/camel-kamelets/blob/main/kamelets/sftp-source.kamelet.yaml#L89 / https://camel.apache.org/components/3.20.x/sftp-component.html#_endpoint_query_option_ignoreFileNotFoundOrPermissionError