I'm glad you're taking screenshots. It would be working if you hadn't extracted the files from the zip. Just keep the zip file intact as-is, and place it into the TexturePacks folder. The folder with the images in it (called 'Images') will now be in this directory within the .zip file looking like this:I've followed your instructions and the results are still the same.
Are there any other possible reasons as to why this is happening?
Documents\My Games\Terraria\ModLoader\TexturePacks\Texture Pack.zip\Images
As you can see, the ".zip" is still intact there. The only thing you want in your ModLoader\TexturePacks folder is the .zip file from my download, with nothing moved.
So to recap, you just want to download my .zip file, place it into an empty ModLoader\TexturePacks folder, and it'll work perfectly. Keep it simple.