A few questions...

• What licensed Esri Software is installed on the same machine as FME Server?
• Are you using the Licensed GDB writer/reader? If so, consider the API reader/writer
• Check what your python is set to, if you dont need arcpy, set it to a non esri python

I currently have the advanced license for ArcGIS Pro installed. I am not using a gdb reader/writer, just a basic shapefile reader so I do not think I would need to use the API reader/writer. Im not quite sure what you mean by python is set to, could you explain further? Also I've attached some pictures of the job failing in FME server but running in FME Desktop.

Under Scripting in the Navigator you can change your python interpreter

Are you writing anything to SDE? The fact that its asking for an advanced license suggests you are?

https://community.safe.com/s/article/required-arcgis-license-types-for-fme-geodatabase

If thats the case, you need to make sure Esri on the server is licensed to that level

Make sure that the "bit-ness" of FME Server matches your Esri installation. For example, FME Server 64-bit won't work with ArcGIS Desktop, unless you also install the Esri 64-bit Background GP. More information here: https://community.safe.com/s/article/notes-on-fme-and-esri-versions-and-compatibility

From a legal perspective, you should also take note of the contents here: https://community.safe.com/s/article/using-fme-server-with-esri-software

Im not writing anything to an SDE. Under Python Compatbility it was already set to Python 3.7+ instead of an Esri python. My current readers are shapefiles and lasd (which I think requires the license) that I created in ArcGIS pro.

I believe I have the required licensing. Im currently running FME Server 2018 and have ArcGIS Pro 2.7.0 installed with the Data Interoperability Extension installed

If you use ArcGIS Pro, then you must use FME Server 64-bit, is that the case? 32-bit FME Server will not work with ArcGIS Pro.

Yeah sorry for not specifying, I'm using fme server 64bit

A few potential ideas:

1. ArcGIS Pro 2.7 is compatible with FME 2020.2.2 or higher. You are trying to run it with FME Server 2018.
2. FME Server may not play nice if you aren't using a ArcGIS Enterprise License. Check out Using FME Server with Esri ArcGIS Software.
3. Also ensure that you are publishing your workspace from FME Desktop 2018.