Thanks for taking time to write this.
I have never had this myself, nor have seen this issue reported before.
When You are first presented with this dialog:
after pressing Yes, Your "Bitmaps paths" should be populated with all the necessary paths.
They should be seen in both 3dsmax.ini and "External Files" tab:
No max restart needed.
There might be some configuration conflict in Your PC.
Thanks in advance for any further comments on this issue you can share with us / our user community (in case some user(s) will run into similar troubles).