I have been having issues when running geoprocessing tools in ArcMap 10.6 where the tool crashes and refuses to popup fully. The issue can be resolved by changing the internet security setting from "medium-high" to "medium" but my companies IT/Security team does not approve. They are requesting the URL that the tools are trying to access but I have not been able to find any literature from ESRI about what exactly they are accessing. My IT team wants the URL so they can addd it to their trusted sites rather than change the internet security setting (which could open us up to other issues).
The tools aren't trying to talk to a URL on the internet.
When you launch the tools, ArcMap is actually constructing tool pages in HTML (this is an incredibly simplified explanation). Anyways, the point is it makes use of ActiveX and HTML to show these tool dialogues, as such your Internet Settings on the machine come into play.
There are a lot of Esri Knowledge base articles on this. Check out Problem: Issues with ActiveX controls when launching ArcMap which explains lowering the security settings for your intranet. Hopefully your IT people are ok with intRAnet lowered settings...
I realize the error you mention isn't the same as this help article, but your explained solution is. Thus my assumptions on your actual problem.