Where did Sufism first emerge? Did not the scholars of Islam denounce the concept then?

We can see that Kufah is the place where this terminology appeared. Of course, this terminology did not appear out of the blue. It appeared because of some people adopting this practice. Christian monks and mystics of this period of time and before began to wear rough wool, and this is well known, because the concept that they held was that you had to mortify the body to free the soul. You beat the body because the body is what is stopping you from reaching the soul to be united with God. Therefore, you have to torture the body so that the soul could be released to be reunited with God. They went into many different exercises a day. One well-known Christian mystic in Egypt lived at the bottom of a well for umpteenth years without coming out of his well, an area which was infested by mosquitoes where he would just be bitten to pieces. There were many varieties of other things too. However, the wearing of rough wool is itchy, when you put it on its always itching and you have to fight it.  You are torturing your body and mind in overcoming it, and this is their concept of building your spiritual power to overcome the pain coming from the wool. This was the practice amongst the Christians.

As early as 719 C.E., some Muslims started following this practice of wearing wool. Scholars of the time reprimanded them. One particular individual reportedly named Farqad Subki, a student of al-Hassan al-Basri, was reprimanded by Ibn Sireen, a well-known scholar of Ahlu-Sunnah wal-Jama’ah of that period of time. He reprimanded this individual for taking on this practice, pointing out that he (Ibn Sireen) preferred to follow the example of the Prophet (ﷺ), who clothed himself in cotton.