That error message is rather confusing.
The thing that you need to understand about that error message is that "|" means "or".
So, the error message is saying that BiblioSpec tried to find a file whose named started with "2020-1-21-kb-70min_FAIMS_100micron_3cv_-35_-45_-55-OTIT_AJ-DMSO-1" and ended with one of the following filename extensions:
".mz5", ".mzML", ".mzXML", ".ms2", ".cms2", ".bms2", ".pms2", or perhaps even "_uncalibrated.mgf" or "_calibrated.mgf".
The error message is also telling you that it tried looking in the current directory (i.e. the same directory that had the pep.xml file in it), as well as the parent of the current directory (that is "..") or the grandparent of the current directory ("../..").
In order to build a spectral library from .pepxml files, you definitely do need to have some sort of mass spec data file (.mzML, etc), since the pepxml. Do you have any mzML (or other type) files? Can you copy them into the same folder as your pepxml files?
By the way, this is a very helpful page which tells you exactly which peptide search engines BiblioSpec understands, and which files you need to give to BilbioSpec in order to build a spectral library: