System problem creating plugin asset: queries_root/…

Recently, while creating a plugin I bumped into an error that was pretty hard to resolve, for it did not have clear pointers to what was wrong. While installing a packaged plugin, the following error was encountered:

System problem creating plugin asset: queries_root/.....

Here is a screenshot:

After considerable investigation, it turned out the problem was how the plugin was being packaged. If I packaged the files whilst the directory was expanded, that resulted in an error while installing the plugin. 

Packaging files in this display resulted in an error during installation.
 

On the other hand, when the directories were not expanded, it worked.

This issue was encountered on a Mac. If you bump into similar issues, hopefully, this will help you sail through the issue.