Very uglily message.
This is happen and in Car Setup (garage) screen.

btw, this is OLD LFS "BUG".

I've never seen that message - are you sure you're not loading an out of date setup, or a corrupted file?

Well, I've seen that "Could not load settings - using default" sometimes, but since it was rare, I can't remember when and why exactly its shown. Somewhere around the point of switchig cars and tracks but I really didn't pay attention to anything specific, maybe the sets for two cars had the same name, I dunno. It doesn't bother me at all though, because I have to choose the right setup anyway.

If nothing was wrong with the settings then the message wouldn't come up. That means something was messed up with the settings. That means LFS somehow confused itself. That means there is a bug somewhere (unless everyone with that message hex-edited his settings, which is unlikely, as I can confirm that the message comes up without any editing from my side).
Problem is that the bug is hard to track down, because I never noticed any impact of the game from that error-message. I can't figure out what LFS had a problem with. I speculate that there may be something wrong with the code that generates that message.
Perhaps it would help if Scawen improved the error message and for example added a more detailed line to LFS's logfile so we can see what was wrong.

Vain

Well, I've seen the message - after deleting a setup which was the last one used. If you delete it from the folder rather than from the Garage, you'll be sure to get this message.

Quote from Astro [ BJRL ] :

Well, I've seen the message - after deleting a setup which was the last one used. If you delete it from the folder rather than from the Garage, you'll be sure to get this message.

Of course.