(1) Start Terrain Builder 1.31.0.6950
(2) Open "File->Import->Terrains...", "File->Import->Satellite images...", or any other option supporting georeferenced images.
(3) Select a georeferenced raster file (a sample is attached to this bug report).
(4) Note the error and the lack of imported layers.
Also, it is not related to not having a mapframe, because you can also do:
(5) Follow the process to create a mapframe with a specific UTM zone.
(6) Repeat the import process and note the same error occurs.