The ones with a "denied" symbol over them are as expected, the system puts that over the application icon if they are not compatible with the OS.
Catalina moves the system applications. Although they all appear to be in the one combined "Applications" folder, the system applications are actually no longer in
/Applications, they are in
/System/Applications. Keyboard Maestro 9 searches /System/Applications as well for icons, so it should find them.
I see in your Icon Choose, it is showing Notes.
You can run the commands:
/usr/bin/mdfind -onlyin '/Applications' 'kMDItemContentTypeTree == "com.apple.application"c'
/usr/bin/mdfind -onlyin '/System/Applications' 'kMDItemContentTypeTree == "com.apple.application"c'
to get a list of the Applications that Keyboard Maestro will look at (Keyboard Maestro also looks in
Then for each of those it will ask the system for the icon for that file.
So it may be Spotlight not finding the applications, or it may be the Launch Services system is messing up the icons.
Or it could be something else entirely.