The game typically requires texture resolutions to be a power of 2, like 128, 256, 512 etc.
If a texture with an unsupported resolution is used directly it can cause CTD or performance issues. It depends on the used compression format and the exact situation the texture is used in.
A texture that is added to a texture atlas can technically use any resolution, since the atlas texture resolution meats the requirement. Tree/grass LOD billboards are typically never used directly.
For mipmap generation, textures should have resolutions that are divisible by 4, which is also a requirement of the newer compression formats like BC7.
In case there are 3rd party LOD billboards listed in the message (textures\terrain\LODGen\*), remove all 3rd party LOD billboards and instead use TexGen to generate all the desired LOD billboards. See TexGen Configuration for more.