I tried all that :/ That error on first picture: I didnt select sea folder manually, it went there by itself, but it does that only when double clicking sh4 folder (so the directory tree expands). When I only select sh4 folder by clicking on it once (just like on the 2nd pic) it display that second error. So:
But knowing that it still writes the game path in the ini file, I tried to ignore those errors and generate a report and got a message that it cant read or find jsgme.ini but it looks for it one directory up.
Its frustrating to not have at least some lead to how resolve this problem, cause it would help at least two other people here too.