The bug
When creating an installation and attempting to add a custom icon that is not the correct file type/size, an error message 'Icons must be 128x128 pixel PNG files' appears. However, when selecting a valid preset icon after this and then reopening the selector page for the icon, the error message is still present.
How to reproduce
Open the Minecraft Launcher, and navigate to the Installations tab
Create a new installation and attempt to change the icon to a custom icon in an unsupported file type/size (non-128x128 png)
Observe an error message (this is intentional)
Select a valid preset icon (not a valid custom image), and notice how the selection menu closes
Reopen the selection menu, and notice how the error message is no longer present (this is likely not intentional)
Media
I have attached a video MojiraTLauncher.mp4. Please note that this has nothing to do with TLauncher (the illegal pirated software); I have never owned a pirated software and this was tested in an unmodified launcher in version 2.1.17783.
The attachment name is just the correct letter in my system for organizing my Mojira attachments. I will request reopening from Arisa invalidation if needed.
Will be resolved in the next release