Cannot Add Material To Billboard

I am having an issue where I cannot add certain materials to a material billboard. Same thing with just trying to add the texture to a normal billboard.
I click and drag the material or texture to the billboard and the green dashed box shows up but when I let go, it will not apply. The drop down menu won’t add it either. Some things can be assigned, but everything I actually need to use will not.
Is there a limitation with what you can and can not assign to a billboard?

Haven’t figure it out EXACTLY yet, but after moving the textures to a different folder both less deep in folder hierarchy and a shorter folder name, they work.

So I’m not sure if there is a folder length limit or something of the sort.