I have never seen that error before, but here is a clue: When you use BULK INSERT and you are logged in with a Windows login, SQL Server will impersonate your login when accessing the file. Thus, it is your permissions that apply, not those of the service account.
But the error message tells us that it is not the permission on the file that matters, but it is the impersonation as such that fails. Why, and exactly what that message means, I don't know. That's something that happens in Windows.
A possible workaround is to run the BULK INSERT command being logged in with an SQL login, because in this SQL Server will access the file with credentials of the service account. That is, itself, and there is no impersonation.