I haven’t found a solution for this in Google yet, but I do have another workaround which doesn’t require typing in Terminal:
Click the blue “i” in the error dialog to show the entire path to buildapp.sh.
Double-click on buildapp.sh, to show it in Finder.
The first time you do this you’ll need to set Terminal as the default tool to open .sh files:
In Finder, right-click on buildapp.sh and choose Get Info.
Expand Open With and select Other, then naviate to Applications, Utilities, Terminal. Select Enable All Applications, click on Terminal and Add. Click Change All… and close the Info panel
Double-click on buildapp.sh in Finder and it will launch in Terminal and build the app.
Before I did this, I’d also given Terminal Full Disk Access, though I don’t know if this is necessary.
I submitted this to Apple Developer Technical Support Incident and the engineer has determined that it is a bug in macOS Ventura. For some reason the event being received from Terminal is marked as quarantined even though the app is not.
I am working on executing the script directly from SAB and then displaying the output in a window (similar to how the Scriptoria sync status is displayed). I have a little bit more testing to do.