Yeah it seems like its problem with Power Fx Convert file to binary data -action or the usage of its output value.
Even if you try to just Set variable with the BinaryData output it gives the same error:

So preview version bug for Power Fx most likely.
I did find a way to do a simple work around with Run .NET script -action for anyone interested:

And in the Edit script parameters window:

So "filename" is the variable that has the file path. The direction is In since it takes that value in and the type is String.
"bytes" is List type variable and direction is Out. And the Output variable I named to BinaryOut
BinaryOut returns PAD a long list like so:

Send an Email (V2) Attachment:

So just use the output from the Run .Net Script action
The whole flow:
