I don’t know, if the bug still persists or if it has already been fixed in a newer version, but it’s been reported a couple of times in the last half year or so:
I’ve posted a work around or alternative using GHPYthon here, if you’re interested:
I usually don’t use the File (“Read File”) component, since I oftentimes need more specific text parsing or type casting workflows.
It could simply be that Rhino has not the right privileges (i.e. Full Disk Access) to read the file at the given location?