All variants of Spice derived from Berkely Spice, including LTSpice, have always had the restriction that the value of any Resistor in the netlist cannot be zero Ω. Think about what happens when LTSpice tries to evaluate this: I=E/R.
When stepping a resistor value, just start with a minimum value of 1uΩ or 1mΩ. Change your command to
.step param pot 1m 25K 5K
and it will work as you intended. During the first step, the value of the resistor will be 1mΩ, which is so close to zero that you will still see how the circuit works with the pot diddled to it's min. value...
The error message told you exactly what was wrong... There was nothing wrong with the installation.