To be honest, I have been getting this error for quite some time now, every now ever since I started working with Dynamics 365 SDK. And believe me it can give you a nightmare.
Plugin registration tool is one such utility which we use everyday without much notice but as soon as it stops working, life of a CRM consultant becomes a living hell. And I find lot of consultants facing this recently.
No worries you are on the right page towards solving. All you need to do is go ahead and delete the contents of the folder – C:\Users\<username>\AppData\Roaming\Microsoft\PluginRegistration and you should be good to go.
Hope this helps!
Debajit Dutta
(Dynamics MVP)
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