This LT command was very old, way before LT string variables were introduced and apparently we failed to update it, we will do it for upcoming Origin 2022, for now, use the % substitution, see below:
string str1$="C:\temp\test1\test.txt";
string str2$="C:\temp\test2\test.txt";
type -v "copying from [%(str1$)] to [%(str2$)]";
@ERR=0;
file -c "%(str1$)" "%(str2$)";
@ERR=;//from system GetLastError if CopyFile failed.
Please make sure you have write access to the destination as c:\Users\ typically is not writable.
See also
https://www.originlab.com/doc/LabTalk/guide/Substitution-Notation#.25.28_.29_Substitution
CP