When you try to upload an image in WordPress Media Library, you got “Missing a temporary folder” error.
First, try switching Media Library from grid view to list view. Grid view use PHP to crop the thumbnails to proper dimensions which can use more CPU/RAM and cause your site hit server resource limit.
Second, check whether you are using PHP-FPM or not. If yes, you may reached the PHP-FPM max_children setting. You can either raising it or disable PHP-FPM.