I was able to create a 4.12.3 project (Third Person Template) and set the build configuration to shipping then package for Windows (32-bit) successfully. Since this occurs in a new project for you, could you provide the exact steps from project creation until the error occurs? Are you using a blueprint or a code project? Also, are you using the binary engine from the launcher or a source built engine? If you have access to other engine versions, do you get the same error when trying to package a project in that version?