Biber transforms LaTeX-ASCII-escapes like {\`y}, {\"a}, {\ss} into the corresponding Unicode character (ỳ, ä, ß) in order to be able to sort them properly.
That means that Mutn{\`y}, Mojm{\'\i}r is transformed into
Mutnỳ, Mojmı́r
With pdfTeX, LaTeX has issues with both ỳ and ı́.
Taking both of the solutions into account, the following will compile
\documentclass[a4paper,11pt]{article}
\usepackage[T1]{fontenc}
\usepackage[utf8]{inputenc}
\usepackage[style=authoryear]{biblatex}
\DeclareUnicodeCharacter{1EF3}{`y}
\begin{filecontents}{\jobname.bib}
@article{mutny2019efficient,
title = {Efficient High Dimensional {Bayesian} Optimization
With Additivity and Quadrature {Fourier} Features},
author = {Mutn{`y}, Mojm{'i}r and Krause, Andreas},
journal = {Advances in Neural Information Processing Systems 31},
pages = {9005--9016},
year = {2019}
}
\end{filecontents}
\addbibresource{\jobname.bib}
\begin{document}
\parencite{mutny2019efficient}
\printbibliography
\end{document}

But as daleif points out in the comments, a closer look at the paper in question (available via https://proceedings.neurips.cc/paper/2018/hash/4e5046fc8d6a97d18a5f54beaed54dea-Abstract.html) shows that {\`y} is the wrong accent. You want ý, not ỳ.
So the following would be a better .bib entry for this particular paper.
\documentclass[a4paper,11pt]{article}
\usepackage[T1]{fontenc}
\usepackage[utf8]{inputenc}
\usepackage[style=authoryear]{biblatex}
\begin{filecontents}{\jobname.bib}
@inproceedings{mutny2019efficient,
title = {Efficient High Dimensional {Bayesian} Optimization
With Additivity and Quadrature {Fourier} Features},
author = {Mutný, Mojmír and Krause, Andreas},
maintitle = {Advances in Neural Information Processing Systems},
booktitleaddon = {Proceedings of the 32nd Conference
on Neural Information Processing Systems
(NeurIPS 2018)},
venue = {Montréal, Canada},
volume = {31},
editor = {S. Bengio and H. Wallach and H. Larochelle and K. Grauman
and N. Cesa-Bianchi and R. Garnett},
pages = {9005--9016},
year = {2019},
}
\end{filecontents}
\addbibresource{\jobname.bib}
\begin{document}
\parencite{mutny2019efficient}
\printbibliography
\end{document}

Mojmír Mutný, that is both are\'yand\'\inot\`y– daleif Jun 21 '21 at 14:37