I was getting this error from pucrunch step:
Only programs from 0x0258 to 0xffff can be compressed
(the input file is from 0x785c to 0x1285b)
Problem was due to printf statement printing a literal string '\x00\x50' rather than the loadbytes 00 50 as expected.
To fix the build, I added
SHELL := /bin/bash
to the top of the Makefile.
Then the build worked.