Note: This is possible if the database files and synced files are copied correctly.
Paths to the Insync folders need to be identical
i.e. If Insync folder in Machine 1 is located in "C:\Users[Username]\Insync" then Insync folder on Machine 2 should be located in "C:\Users[Username]\Insync"
You will be copying two things from Machine 1 to Machine 2: your Insync folder and the dbs folder (database)
Install Insync on Machine 2 but do not add account
Quit Insync on Machine 1 and 2
Copy the Insync folders from 1 to 2 at the identical paths
Copy over the "dbs" folder from Machine 1 to 2:
machine 1: C:\Users\[Username]\AppData\Roaming\Insync to
machine 2: C:\Users\[Username]\AppData\Roaming\Insync
machine 1: ~/Library/Application Support/Insync to
machine 2: ~/Library/Application Support/Insync
machine 1: home/username/.config/Insync to
machine 2: home/username/.config/Insync
5.Start Insync on Machine 2 and 1
If you cannot have identical paths for Insync folders on Machine 2, then the Insync folder path on Machine 1 should not exist on Machine 2 before starting Insync.
This will cause Insync on Machine 2 to notify you that the Insync folder is missing. You can then relocate option to "find" the Insync folder (complete path to the Insync folder).
Thanks to @dipesh for the workaround. You can read more about it here.