I think the problem is that you are not actually passing in a BTB track file, and possibly just want to add the elevation to your KML?
Based on the XML file you've attached, it looks like this is a settings export file that BTB will produce (don't think I've seen this before), rather than the old (v0.6 and earlier) track file?
The tool is able to add elevation to either KML only, or to BTB tracks that were created with v0.6. The BTB track option was the nicest, as it would add the elevation to both the track and the terrain that you had added around it.
With later releases of BTB the track file option is not really usable, unless you are running an older version of BTB (as there is no way to export the track to the XML format either). Piddy has mentioned that he might at some point support a plug-in option for adding elevation, but I'm not sure what the priority for that is likely to be (certainly based on the mixed reviews of the elevation data available in Google and other sources, it might not be worth a lot to many people anyways).
In any case, you can still use the tool to add elevation to your KML file alone, and just don't both specifying anything for the Track File. In that case, the tool will output a new KML file with the elevations added, that can then be imported into BTB.