Finally figured it out,
Make a new folder in
C:\Users\<name>\Documents\My Games\Terraria\ResourcePacks
Call it, TexurePack or something.
Unzip all contents from ZIP inside this folder, as is.
Find in game in texture packs.
Yes, I realise this is in the frequently reported bugs list, however the solution doesn't work.
Context and reproduction:
Using this texture pack (haven't tested with others), Terraria crashes on load after it is enabled...
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