There appears to be a bug with the CSV Data Source in the Web Report Designer - There are 3 options listed: Upload CSV file, Use existing CSV file and Use CSV Inline. When selecting the 'Use CSV Inline' option the forms keeps either "Upload ..." or "Use existing ..." selected and continues to validate for the missing file.
I am unable to reproduce the issue with our live demo - Web Report Designer Demo | Telerik Reporting which uses the latest version of Telerik Reporting - R3 2021. I have attached a short video demonstrating my experience with the CSV Wizard.
Please consider upgrading if you are using an older version of the product.
Are these the correct packages? I'm not seeing any Telerik Reporting packages that need to be upgraded

Is there another way to tell if I'm using the R3 2021 release (or not) of Telerik Reporting?
The webReportDesigner script that is loading is reporting itself as TelerikReporting v15.2.21.915 which matched the package number.
I'm using the nuget.telerik.com package source.
I am seeing a 500 error when loading definationresources?extension=csv
Could that be the cause of this issue?
How do I resolve this issue / bug in the ReportDesignerAPI not providing the needed resource?
The Return error response:
The listed physical path: D:\iFocus Projects\JusticeConnect\JC_Reports\Reports\Resources
is correct up until '\Resources' which does not exist the rest of the physical path to the reports folder is correct and does exist:
'D:\iFocus Projects\JusticeConnect\JC_Reports\Reports\'
For anyone else experiencing this issue:
As soon as I manually created a sub folder called 'Resources' under the 'Reports' folder the issue immediately disappeared.
For Telerik:
It would be nice if this could be documented some where and/or if the component would check and create the missing folder or at least provide a helpful warning message if a required folder is missing and needs to be created in order for the CSV Data Source form to work correctly.
Thank you for the feedback Chris, you are absolutely correct.
I have logged this as a bug on our portal on your behalf. I have also cast your vote for it to increase its priority - The Web Report Designer CSV Data Source Wizard throws errors when the FileDefinitionStorage folder does not contain a Resources subfolder
We will also update the CsvDataSource Wizard with the Resources folder requirement.
Thank you for using Telerik Reporting!