Unfortunately its not possible to exclude special Dolphin .directory files using Updraftplus settings. It ignores the setting exclusion and continues to report “…can’t read .directory” file warnings in the log file during backup.
To work around this add the following PHP code to your Functions file
//
// Updraftplus Backup filter
// Prevent attempts to backup .directory files and generate annoying warnings
add_filter('updraftplus_exclude_file', 'my_updraftplus_exclude_file', 10, 2);
function my_updraftplus_exclude_file($filter, $file) {
return (basename($file) == '.directory') ? true : $filter;
}