Found the solution - adding tmpdir parameter with the new system temp location to the mysqld.exe service fixed the issue.
The parameter can be added by changing the path to wampmysqld64 service (regedit: HKLM\SYSTEM\CurrentControlSet\services\wampmysqld64: add in ImagePath after the file name):
...\mysqld.exe --tmpdir=X:/tmp wampmysqld64
where X:/tmp is the location set as TEMP in System envi
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