Did you extrude your sketch to make a body?
use the hot key “e” then extrude your square, you will notice it has cut out the circle. you can then go to manufacture and do your setup and select your cut paths. By extruding you eliminate the need to select individual contours.
Hopefully doing this will get you past the errors…
Im not familiar with that error. I looked it up on the Fusion360 forum… there were some old posts about a glitch causing that error but nothing recent that seemed relevant.
Hopefully Tin can explain that for both of us.
Watch these videos from @TinWhisperer. They are short, concise and relevant to CNC plasma.