Mod Terrain Failed?

Is anyone else having issues since the update on getting the terrain failure message? I try putting in a path and it won't do it. I'm on the flat terrain, I've tried flattening it more, using the 'mod terrain' button on the paths and even using tunneling to try and get it to work, nothing does. I've restarted the game several times in different areas but it still has issues.
 
I've always gotten that message if I try to place a building or path too close to the habitat wall. But nothing unexpected since the recent patches.
 
Where exactly is this happening? Water bodies, habitat barriers, shops, staff buildings etc can all interfere with the path if there is even the tiniest elevation difference. The fix is to turn off flatten terrain when building paths around these objects , best thing is to flatten the entire area you want to build on first with the terrain surface tool.
 
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