IOException with VM Options

Whenever I run the plugin locally in a sandbox, I face the below IOException. I don't use/need to set any custom VM options.

1.) Why do I get this?

2.) Would this issue affect anything related to resource allocation during runtime, in turn affect display of any stacktraces due to memory restrictions or anything?

WARN - #c.i.d.MemorySizeConfigurator - The IDE is not configured for using custom VM options (jb.vmOptionsFile=null)
java.io.IOException: The IDE is not configured for using custom VM options (jb.vmOptionsFile=null)
    at com.intellij.diagnostic.VMOptions.setOptions(VMOptions.java:202)
    at com.intellij.diagnostic.VMOptions.setOption(VMOptions.java:193)
    at com.intellij.diagnostic.VMOptions.setOption(VMOptions.java:175)
    at com.intellij.diagnostic.MemorySizeConfigurator.execute(MemorySizeConfigurator.kt:54)
    at com.intellij.ide.startup.impl.StartupManagerImplKt$launchActivity$1.invokeSuspend(StartupManagerImpl.kt:496)
    at kotlin.coroutines.jvm.internal.BaseContinuationImpl.resumeWith(ContinuationImpl.kt:33)
    at kotlinx.coroutines.DispatchedTask.run(DispatchedTask.kt:104)
    at kotlinx.coroutines.scheduling.CoroutineScheduler.runSafely(CoroutineScheduler.kt:608)
    at kotlinx.coroutines.scheduling.CoroutineScheduler$Worker.executeTask(CoroutineScheduler.kt:873)
    at kotlinx.coroutines.scheduling.CoroutineScheduler$Worker.runWorker(CoroutineScheduler.kt:763)
    at kotlinx.coroutines.scheduling.CoroutineScheduler$Worker.run(CoroutineScheduler.kt:750)

I tried the following ways in the IDE instance and when I run the runIde Gradle task from the instance, I see Executing 'runIde -Djb.vmOptionsFile=custom.vmoptions -Xms128m -Xmx2048m'…  but with the same IOException

a.) Run configuration → Modify Options → Add VM Options → Entered  the below

-Djb.vmOptionsFile=custom.vmoptions -Xms128m -Xmx2048m

b.) Help → Edit Custom VM Options → idea64.exe.vmoptions → Entered the below

-Djb.vmOptionsFile=custom.vmoptions

-Xms128m

-Xmx2048m