From the online help...

MicroCode Studio is unable to process one of the debug files due to line truncating.

When using some operating systems with the PICBasic default assembler, long path and filenames can result in important debugging information being lost. Under these circumstances, the ICD is unable to operate correctly. To correct this problem, ensure that the PICBasic filename and its associated path are no more than sixty characters in length.

You should not normally see this error if assembling using MPASM.