I am not really sure what is the cause of the error but since it seems to be related on hex file. I looked at on my own installation (that currently works fine) and I found out we have different location. Please check mine on the image
I copied the prebuilt directory out from under the “security” directory and the Arduino builder is happy again.
I spent the weekend trying to get VS Code running Arduino (still trying) and found that a load of the Extensions were disabled because they weren’t “trusted”. That has the same smell as hiding prebuild executables under a directory called security. And this whole business of the OS trying to prevent me from using the things I’ve downloaded is consistent with having moved to Win10.