Version 1.2 (64-bit)
OS: Windows 10
Exact error:

Run-time error '-2147467259'
Automation error

I've been able to reproduce it every time. Steps:

Folder: E:\ (with subfolders)
Read only: Clear+Restore
Apply to files with current zone: All 5 options selected
Clicked on Remove Zone Identifiers

It works if I click Change Zones, however.

EDIT: It works if I run as Admin. Must be a permissions issue. Strange, given that I gave full control permissions to everyone on every file on that external drive.