The green arrow is not pointing at an error.
It's pointing at the next line to be executed in the debugger.
The first executable instruction is always GOTO INIT.

It starts debugging at the ASM level in the PBPPIC14.lib file because the "Source-Level Debug" option is not checked in the Build Options for your project.

Go to Project > Build Options > Project > PicBasic Pro ... and check the "Source-Level Debug" option.
That will generate the -k# command line option.