Broken - you'll probably know why without reading the rest but...
btw, I prefer the previous location, of the .sta file, inside the terrset0# folder with the atlas#.txt files.
For testing:
Create a custom object and create its .swa tree file. But you probably already have one.
Make sure that there are no previous copies of the .swb file for this named object in the spdtree\swaobj folder! You do not need to clear the stdshape folder to test this.
Install the shapeswa.txt (tried single s and double s both) as directed.
No joy, crashes the TE due to failure to create the .swb file.
Creating and installing the shapesswa.sta (double s) text file still works, thank goodness.
Nailing it down was delayed because the text files can't be tested if the swb file already exists.
I prefer locating the shapesswa at the level of the atlas#.txt files in the terrset0# folder because it instantly tells me I have included the tree files for my square tile objects with or without my custom ground tiles.