It shows dialog "File 'name' not found. Continue?" for such file.
The problem is in mfsearch.e file, _mfreplace2util function.
Look for the following lines:
edit_called = true;
edit_status = edit('+b 'maybe_quote_filename(path));
get_window_id(edit_view_id);
According to 'edit' documentation file name must NOT be quoted when using '+b' option. Simply remove maybe_quote_filename() call around 'path', press F12 to recompile and reload the module and all will be fine.
edit_status = edit('+b 'path);
Cheers!