I encountered the red square of death after installing the modding tools and tried many things without success. Ultimately it was fixed for me by deleting both the folders below:
- C:\ProgramData\Mount and Blade II Bannerlord
- X:\Steam Library\steamapps\common\Mount & Blade II Bannerlord\Shaders
Deleting only the shaders folder in Steam was not enough. There is another shaders folder within the C:\ path above, so delete both. Note the X:\ path will be different on your computer and will depend on where your Steam games are installed. To find it right click the launch icon in steam and select "Browse local files".