Issue with softlink creation in Ubuntu 20.02 inside a Ubuntu docker container

I am facing issue in a docker container startup. At starup of the docker container, I want to create softlinks of about 300-400 links in root-volume which is C_drive inside a docker container. The Source of the folder is EBS-volume which is mounted as D_drive. The destination is in the root-volume(C_drive). The EBS-volume(D_drive)is full, the root-volume has enough space. At the time of starting the container which is ubuntu version 20.02 the softlinks are created. I am getting error "Out of space" while creating the softlinks. The destination folder for softlinks is root-volume, why I am getting error "Out of space". As a solution, I freed 1 MB file in the EBS-Volume, then the softlinks are getting created. Once the soft links are created I am able to copy back the 1 MB file. If the softlinks creation occupies space, why I am able to copy back the 1 MB file? Why does the softlinks creation needs space in the EBS-volume(D_drive)?

The host machine has Amazon Linux2

The command used for Soft Link creation is,
eval ln -nfs "$SOURCE/*" "$DESTINATION/" || error_notification

erro_notification is a shell function for handling and logging the error.