Hello,
This could be caused by the fact that you have the "Run as Administrator" option ticked in the "Properties" tab of your "LaunchFile" custom action. This is an Advanced Installer's limitation.
A workaround for this is to untick the "Run as Administrator" option from the "LunchFile" custom action and, instead of that, run the whole project as Administrator by ticking "Run as Administrator" option from the "Install Parameters" page --> "Installation Options" tab.
As another workaround, you can follow the steps presented in the
"Re: Launch File custom action command line error".
Hope this helps!
Regards,
Catalin