I'm aware that a project has to be selected, and a project file has to have focus - this was actually an annoying issue because the 'welcome' page would come up and of course it's not a project file. I'm not sure if that was changed or if I disabled it.
Sometimes the blue debug button is active, sometimes it's not, and I haven't been able to find any pattern to it. This morning it's there. I never use it because it's so inconsistent, but I decided to give it a try this time.

Minor quibble here - the default layout of this dialog is too small to see the names of the debug configurations, even though the project name is a single 6-letter word. I can't tell which of these is my 'attach' configuration without resizing the whole thing.

After selecting the launch configuration I want, it asks me to do it a second time, this time with the choices narrowed down to that one probe - but I was selecting a launch configuration, not a probe. And we're back to a layout that can't be read without resizing.

Selected the one I want after resizing.

Maybe the LPC-Link2 is having a bad morning. I click on the blue debug button again to give it another try, and this time I get something else:

Note that my P&E Cyclone is gone from the list. So I choose the only option, and have to resize the debug configuration dialog again to make my selection. I get the same error again, so I power cycle the probe and the target board and run through the whole thing again, still using the blue debug button, and this time it connects and works properly, but when I go back to the debug configuration screen it's created a new configuration:

THIS is why I don't use the blue debug button. It's inconsistent, inconvenient, and clutters up the list of configurations. And even after creating that duplicate entry, it still prompts me with two or three dialogs (again, it's not consistent) before letting me launch.
I just restarted MCUX to try again, and now the debug button is disabled. You can see here that the project is indeed selected:

If I click over to the quickstart panel and THEN to a project file, the debug button activates. Maybe the issue is that you've always got the quickstart panel set to come up first and it hasn't been tested with a different layout?
All of this is just to illustrate why I don't use the blue debug button. But the main issue of this post still remains, namely that it won't let you use the debug button from a configuration where the executable has been selected from the browse button.
On top of that, the 'debug' button status doesn't change until you leave the configuration and come back, which makes the experience even more inconsistent. I captured a screen recording - it doesn't show the dialogs that pop up, but it should still illustrate the problem:
Dropbox - 2018-07-23 09-53-29.mp4
Note that in this video, the 'program does not exist' error does NOT appear, as it does when the executable is actually missing:

It can also still be launched from the recently used configurations drop-down on the green debug button, so the configuration is in fact valid and whatever enables or disables the 'Debug' button in the configuration screen is incorrect.