Solution
This error is caused by LabVIEW not being able to correctly locate the virtual environment folder, to solve this make sure you are pointing the Open Venv Python Session VI to the root folder of the virtual environment and not a file within the folder where the virtual environment was created.
Setting a file within the virtual environment as the path for the session will produce the error:

Select the root folder of the virtual environment to avoid the 1746 error: