Doesn't seem like an issue with msbuild or the new VS update to me. You said you merged your current project into Git but I wonder if what you see as the project structure is the actual structure on disk to Git. It really depends on where the build is occurring. If this is being triggered by your CI process then the current branch contents is either your PR branch or the master branch after your PR branch merged.
I would start by cloning your repo to a brand new directory. Then verify the resource file is where you expect it to be. Given the name it appears it should under the project directory where it is being referenced. Next I would do a command line build from the Developer command prompt. If it builds there then everything should be fine. However I'm assuming your command line build is using the same settings as the build that is failing (aka same configuration, platform, etc). I would then move on and try a Visual STudio build. It should continue to work.