So, I encountered this for the first time today, the context being a colleague wanted to quickly FTP some files up to an Azure Web app. However no matter what directory they tried, they always got the same error:
Initially I thought they must be a permission missing from the user account, however they had got the credentials from a .PublishSettings for the web app in question
Within the XML of the publish settings file, there’s a profile entry for a [insert app name] - Readonly - FTP. This contains credentials for read only access, an easy mistake since depending on your editor, the XML file might be 1 long line. The correct FTP publish section will just have the word FTP.
Hope that saves someone some time!