Description
Point features are an invalid input feature type for the Feature Envelope To Polygon tool. Since the envelope of a point has no area, using a point as input does not return any meaningful information and is restricted.
Solution
Use the Buffer tool to buffer the points to create a polygon, which is a valid input type, or choose another feature class containing polygon or line features. If you decide to first buffer points, choose a buffer distance that will be the length or height of the envelope around each point.