Description
Point features are an invalid input feature type for Feature Envelope To Polygon. Since the envelope of a point has no area, using a point as input would not return any meaningful information and is restricted.
Solution
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 choose to first buffer points, choose a buffer distance that will be the length or height of the desired envelope around each point.