Are you looking in the correct location? The
Packages folder that you’re looking at here is the package files that ship with Sublime Text in it’s installation folder, and is entirely a hands off kind of location (i.e. if you deleted your
Default.sublime-package file from here, you’re crippling Sublime).
Packages folder you want to be looking at is the one that you get to by using
Preferences: Browse Packages from the menu or the command palette. If there’s a folder there named
Default, then the contents of it are overriding what appears in the package in your screenshot.
And in particular, in Sublime Text 3 the
exec command took different arguments than it does now, so the error message you’re seeing here is an indication that this folder has an
exec.py in it that’s getting angry about the new argument that it’s being provided.
Generally speaking, you want to take that
Default folder (if it exists) and move it away to your
Desktop and restart Sublime; any files in there are almost certainly causing you woes as there have been major updates to this version of Sublime, and any files in there are masking some of them.