Search Path file not able to read from Folders path provided in Creo Parametric.

Impossible to confidently diagnose the problem without any detail.

Possible issues could be special characters in file path that work in windows that don't work in creo

Creo used to have problems with spaces in folder names, I don't remember when they corrected that but see if all the problems folders have spaces.

check folder spelling in the search path and make sure that search path is working at all  (search_path_file) is formatted correctly.

I'm sure there are other possible issues, but those are the ones I could think of quickly.

I agree with Stephen about this. Hard to diagnose what your problems may be, but in dealing with this in the past, I've arrived at my own "rules" about the search path file:
(1) I always use full network path names, That means "\\server-name\..." and not something like "Q:\..." for the path designations. This makes the search paths useful for others in your company who might have different letters mapped to the drives you all use. It also helps when you get a new computer and don't remember what letters were mapped to what drive.

(2) Always enclose paths in double quotes. This way you can have spaces in names and the paths will still be interpreted correctly. If you omit the quotes and have a space, Creo will only use the text up to the first space as a path - not what you want.

I don't know if there are limitations on the number of characters in a path. I have some very long ones, but with a tendency of certain coworkers to use long sentences for directory names, this might be a problem in the future.

Some special characters will cause paths to fail. I think there is trouble with the "&" character, and maybe others. I don't remember which have made things bad in the past. I find it's easier to not use any of the weird characters like that rather than trying to debug why things aren't working.