This looks to be a limitation of Postgres, where the max length of an identifier (including table and index names) can be 63.
And when creating the relation on the component, strapi concatenates component name, and the referenced collection’s name, that can easily become too long.
E.g. I had the issue with this name: components_fm_fm_how_to_article_components_fm_how_to_article_links_fk
As @rendysyabany mentioned shortening the collection name and/or folder name can help, and as an extra, once you successfully created the collection with the link, you can rename the display_name of the component, so you can have it changed.