When performing an Application Server 9.1 IFR upgrade on Windows, in-place backup is not correctly integrated with asupdate.bat form values. Specifically, if you enter incorrect information in an ASupdate.bat GUI screen and then click Next, the upgrade installer tries to detect if it is an in-place upgrade. If yes, domain1 is moved to a backup directory prior upgrade. As the upgrade proceeds, and an error message is displayed as a result of the incorrect information. When you attempt to correct the error right away, the a path error is thrown because domain1 was already moved.
Either change the source directory to be the domain1_timestamp directory in current-source-path/backup or exit the installer with the Cancel button and start again.