I saw an error File/Dir not found 404 on your demo as attached picture.
How to fixed error File/Dir not found 404 by drag and drop folder(s) after I clicked open it?
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The error is actually thrown by the browser itselft since it is unable to access the system log file as well as to load it. You will get the same error if you directly try to load the path to the file in the browser address bar - https://demos.telerik.com/aspnet-ajax/FileExplorer/Examples/Overview/images/Northwind/Customers/_vti_cnf.log.
If you try to double click on an image at the same demo, it will be opened fine since the browser has access to it and can render it.