I just ran a couple of tests in Terragen 4.7.19, first exporting an OBJ directly from Xfrog with an MTL file. This is my base object and MTL file. It has textures which are located on another network.
I copied the base file a few times, renaming each new object to myTree.0001.obj, myTree.0002.obj etc. I did not duplicate the MTL file, there is only the one.
Individual object test
I loaded the base object into Terragen via Add Object > Populatable Object, and manually changed the Filename parameter under the File Read tab to include the number variable, for example, myTree.%04d.obj.
I was able to advance the timeline and render the tree with textures. I only received a warning when I advanced the timeline past the last object in the sequence and hadn't set the Sequence last parameter to the last object number.
Population test
I loaded the base object as a population. Under the object reader node for the population, I manually changed the Filename parameter to include the number variable.
I got the same results, advancing the timeline and rendering frames. The objects and textures were visible unless I advanced past the last object in the sequence and hadn't set the Sequence last parameter value. In this case the trees didn't render at all.
I was also able to save, reload and render the Terragen project file without any issues.
Possibly try using just one MTL file for the whole sequence.