Can't loading .ini/.txt from Binary files

INI files can be embedded with Data Elements. You then extract them with System object (first one in event editor), then pass the original path to Bin Temp File Name expression to get the extracted path, which will be in Windows Temp folder. You can then load that in INI.
However, it will be read-only, you can't re-embed the file into Data Elements after modifying it. So, you should copy them to App Data, using File Object expression to get the app data path, and open it there, where it will be kept.

Binaries do work if you load from a different drive. However, you'll need access permissions, obviously - what some people miss is they write to the C:\ root folder, or C:\Program Files, which are admin-write-only, and so normal programs running with user (not admin) permission level can't access them. Which is why installers request admin permission to run, so they can write to Program Files. Application settings and modifiable data is then saved to somewhere in app data folder.

But no, there is no limit on what drive you can use from where.

This is correct order of events. Looks OK. Also check INI Object properties - it may override path to App Data.
Also check this is enabled:

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Well, that should be everything. Why not check the binary temp file is created at that temp path? It's either the creating or the loading that's failing.