Yes, Keyboard Maestro is clearly launching translocated.
This is not something Keyboard Maestro can “work around” - it is a security feature that needs to be dealt with.
As @ccstone suggests, at the point I would:
- Turn off Keyboard Maestro’s Launch Engine at Login
- Quit Keyboard Maestro Engine and Keyboard Maestro
- Delete Keyboard Maestro.app (either use the Finder “Delete Immediately” or trash it and empty the trash,
- Verify there are no other copies of Keyboard Maestro on your Mac.
- Download a fresh copy from https://download.keyboardmaestro.com
- Using the Finder move the Keyboard Maestro.app to the Applications folder.
- Launch Keyboard Maestro.
If that still does not resolve it, then a visit to an Apple store is in order.