To simulate this, We created a shared folder on a Windows 2008 R2 server that did not have FSRM installed. On another server with FSRM installed, we attempted to connect to the remote share through the UNC path. Even though the Storage Reports Task Properties allowed this, once we clicked OK, we received the following error:
\\ServerName\ShareName is an invalid local path for namespace root, please replace it with a valid local path.
We also attempted to use the hidden share at the root of the remote servers hard drive as our access point, this did not work.
We then mapped a drive the share folder. In the Storage Reports Task Properties where we specified the location to scan, the mapped drive would not show up.
I think it is safe to say that we can allow scan local drives for FSRM reports.