Why does the Intel® Quartus® Prime Software fail to recognize the 3rd party license in the Intel® Acceleration Stack version 1.1?

Due to a problem in the Intel® Acceleration Stack version 1.1, you might see the following error messages even though the 3rd party license is set up properly:

Error(292014): Can't find valid feature line for <custom_IP_name>.v/.vhd in current license.     

Error(13226): Can't open encrypted VHDL or Verilog HDL file "<custom_IP_name>.v/.vhd" -- current license file does not contain a valid license for encrypted file 

Error(13223): Verilog HDL or VHDL error: cannot open verilog/vhdl file <custom_IP_name>.v/.vhd

To work around this problem, either use the version 1.2 or later of the Intel® Acceleration Stack or install the patch 1.02dcp for the Intel® Quartus® Prime Pro Edition Software version 17.1 Update 1.