My first thought was of FM/2 INI corruption as referenced in the popup; I used known good ones, (I have generations), I opened FM/2 without any fm3.ini file, (I deleted it, to force FM/2 to recreate one). I also deleted the references to FM/2 in the OS2 INI file as well. No change. Very strange.
I looked for FM/2 dependencies outside of the FM/2 folder and as far as I am aware there are none.
I had made some recent changes in my Config.sys but only as relates to the *:\usr directory(s) and my \Python paths etc. I also used known good Config.sys files as well, going back several generations; still no change. Very strange.
I even restored the desktop using Unimaintenance and OS/2 archives. Nothing.
I suspect that some *.dll or driver has crept in there somewhere and is interfering with the loading process, but I'll be damned if I know what it could be. I have changed nothing in that regard... at least, not by intent.