Preview Version 1.4.953 Zotero citations fail with Knitr - pandoc failed with error 1

Very excited about the Zotero citation integration with preview version of RStudio.

Works great to use, however when using Knitr to create pdf or other format, it fails with pandoc error 1. Error message reports that the references.bib file that was created by inserting Zotero citations does not exist, but it does as shown in image below.

Is this a bug or is there a workaround?

System info:
RStudio Version 1.4.953 (preview)
R version 4.0.3 (2020-10-10); all packages are up-to-date
Mac OS High Sierra 10.13.6
Zotero 5.0.92
Better Bibtex 5.2.84 as Zotero add-on
pandoc 2.0.4

What have I done to solve this problem already?
I have google searched and found many pandoc error 1s but nothing related to Zotero integration or 'missing' references.bib

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