I have faced the Same Issue in Load runner 12.50V, as per my knowledge, i have checked that if i give a lengthy File Path for Controller Result, the Screen shots are not generated,
please Give a Shot File Path as "D:\Result 1 " and run the Controller Scenario, and check whether u get the Screenshot generated on error.
hope this may help you.
and if the error is not related to Application Object Detection, or Object action, and system error then it may be a reason its not generating screenshot,
I Got that snapchat on error in controller i have attached that image in below please find it.
when you got error in VUgen then only you got that error in controller which will be visible to you..
1. Take a sample web tours application
2. Record the script in vugen don't conduct correlation.
3. Put a check point using web_reg_save_param("text=dileep",LAST); which is invalid
4. Push that script into controller & enable that Snapcha on error option in controller RTS >> Misllanious>> Generate Snapchat on error.
5. Run the test verify the vuser log by clicking vuser option at running test.
This will be helpfull...........