Reviving this issue on Dec 4, 2023. I followed the steps listed above and I am still running into this issue using Rhino 7, Revit 2023, and LBT v1.7.
With RIR open, I ran the .bat file. In the terminal window, I saw that it set a path successfully for Revit 2023. I also confirmed the path is set and unblocked in the folder: C:\Users(name)\AppData\Roaming\McNeel\Rhinoceros\7.0\Plug-ins\IronPython (814d908a-e25c-493d-97e9-ee3861957f49)\settings
Yet, I am seeing the same error in GH. I tried closing Revit and restarting after this too.
Perhaps its a new version of RIR as @Alakelele suggested?