There are perfectly valid reasons for not installing things into the default installation directory, which is why the vast majority of program installers give you that option in the first place (MakeMKV included, mind you). I never use the default C:\Program Files or C:\Program Files (x86) locations for installing anything, except for those select few things which don't give me any option to change the installation directory (which irks me to no end).
I have a C: partition that is literally for Windows and Windows only, then a D: partition where I install everything else. This is because starting at least with Windows Vista (if not earlier), Windows has an extremely annoying tendency over time to fill up whatever free space is available on C: (I'm looking at YOU, C:\Windows\WinSxS), and installing everything else onto a separate partition prevents me from ever even being able to use up all of that space on C: with my installed apps/games, which would prevent (and has in the past prevented) Windows Updates & the like from being able to complete. I even move the Windows page file onto another partition so that is not eating up space on C:.
That said, I tried copying SDFtool Flasher directly into the root MakeMKV installation folder, as well as "...\MakeMKV\Data" (which is what the Preferences you mentioned show as the data directory), and it still doesn't work in either case.
What did work, however, was creating a Symbolic Link from my existing MakeMKV installation directory on D: into the C:\Program Files (x86) folder...so anyone else running into this issue now knows how to workaround without resorting to completely uninstalling MakeMKV and reinstalling it into the default location. Hope that helps at least a few people out there.
Seems to me that there should be an option when coming across this error to manually point the SDFtool Flasher to the MakeMKV EXE file if it can't find it on its own; that would be a much more elegant solution to the problem for those like myself who prefer not to use the default installation path.
Perhaps this could be a feature request for a future update to the tool? Admittedly I'm not a coder myself, but I really doubt that would be very difficult to achieve.