I ran into this same issue and discovered the problem was because I used TextEdit to create the Code Replacement file and saved it in the wrong format. By default, TextEdit saves documents as an .rtf file instead of a .txt file. I fixed the problem in TextEdit by going to the "Format" menu and selecting "Make Plain Text." Then, I saved the file as a .txt file. Finally, in the list of Code Replacement files in Photo Mechanic, I removed the .rtf file and added the newly created .txt file.
Now the Code Replacement works as expected. I hope this helps someone.