While n8n can interact with SFTP locations (and for example up- and download files or list the content of a folder) I don’t think it’s a great tool to copy entire folders. If you wanted to do so, you’d first need to list the folder content of your source, then download all files and finally upload them to your destination.
Depending on how you have configured your n8n instance this can lead to memory problems if you have a lot of files (or very large files). In such cases you might want to consider calling tools like scp or possibly rclone through n8n’s ssh node.
This way you can still control the process through an n8n workflow, but have server 1 send its data directly to server 2 without having to process every single file in n8n.