I saved as a new module then placed it in the pln file. File>External Content>Save Selection As Module. Placed that new module then selected it but the greyed out 'Choose Hotlink' button still persists. I checked the Info for the Desktop MOD file, but there are no sharing or permission restrictions. I do like your troubleshooting direction taken.
AC27 v. 4060 w/ MEP, Cadimage, Twinmotion 2023.2.2 using AC from AC6.0, 2021 MacPro M1 chip, Adobe CC. Used AC on both platforms.