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Crumpling at a given spot, repeatedly, is a symptom of either
- misfeeding (owing to e.g. loss of a roller that propels the paper, or the roller being too dirtied with age to propel the paper properly)
- obstruction (owing to - usually - a part that is out of place or misaligned.)
If the 'gate of finisher' is near the fuser assembly, then you may possibly have a fuser that is defective more or less... it's something to keep in mind.
As for the error... Xerox reps have said it's indicating a need for firmware updating.
And there are other indications that it happens when a size mismatch occurs in a printing job that is, paper supposed to be one size in the print job, but actual paper not the same as what was directed. It can be a hard error to clear short of a hard reset of the Xerox machine in question for a period of time not to less than five minutes of Off and unplugged time.