That error is from the windows media player. MCEBuddy uses the native media player plugin to render the onscreen video/images. The media player in turn uses the build in media foundation and directshow codecs. Windows doesn’t natively support MKV format and also doesn’t support HEVC (h265) so the media player isn’t able to render it.
You’ll need to add support for H.265/HEVC and MKV to Windows and if WMP can play back the files then you’ll be able to access them through Custom Cuts. This may require some custom tweaking like installing LAVFilters and using the code tweaking tool to adjust the codec priorities.