It does work. You have to make a RAW heightmap of the exact right size for the terrain you’re making – check the “total size” after you configure resolution and number of blocks.
The “_x0_y0” bits are about the naming of the files, because they need to have those names to match up the different terrain blocks.
As you can see from the error message, the name “Arkanir_WiP3” doesn’t end in those bits, but the file names in your second screen shot, do.