Good afternoon,
It seems like the T4 Page Builder (I have the newest Beta 3 installed) may have an issue handling folders (and filenames) that contain spaces in them.
I first noticed an issue when trying to browse into a folder that contained a space in it. If I copied the folder and renamed it to one that did not have a space in the name, I was able to browse into the folder and view my images correctly.
Then, I was trying out one of the Hero blocks and added in a background image of a filename that contained a space and a similar sort of issue occurred (the default image was being displayed rather than the expected one). Once the filename was renamed to something without a space it seemed like it was ablee to then take effect.
This was tested on XAMPP on Windows.