I would assume that the scripts target only default tagets. They seem to be marked with "1" in the Internal column.
USE FNSMCompliance SELECT * FROM BeaconTarget_MT WHERE Internal = 1
Maybe it's enough to remove these.
There was a change in the 2020 R2 release to address to the problem discussed in the following thread which was related to the specific record shown in your error message: Any changes on Inventory setting page is throwing error while trying to save. It may be that this change isn't working well in your particular migration scenario.
If you can't work out how to get past the problem then you may wish to raise a case with Flexera Support to dig further.
I have raised a case and the solution provided was very similar to what you suggested, I was asked to delete only that specific entry that was causing the error, so post that I was able to complete the upgrade successfully.
exec BeaconTargetRemoveByNameInternal 'Known virtual cluster servers', 1
DELETE FROM BeaconTarget_MT WHERE [Name] = 'Known virtual cluster servers'
Thanks to everyone who replied to this query.