I didn't run into this error, but I did manually install .NET 8 (hosting bundle) first so maybe that's why, although I also assume the EXE installer is supposed to handle that for you if you don't do it yourself. As far as I know, you can have .NET 7 and 8 installed at the same time, which might make it safer in case you need to downgrade. I uninstalled 7 after updating SM, because I wasn't using 7 for anything else.
I am also on Windows Server 2019.
Also just in case it makes a difference: I also stopped the SmarterMail service, the SmarterMail IIS website, and the SmarterMail IIS application pool, and then uninstalled 8713, before installing 8720.
After installing .NET 8, I also restarted IIS because the .NET installer asked me to, although I don't know if it's 100% necessary (if you have IIS Manager, click the server, then click Restart on the right side; otherwise if I remember correctly the iisreset command line command handles it). Keep in mind this will bring down all sites on the server for a bit.
@echoDreamz the IMAP sync yammer folder issue was fixed for me in 8720!