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When I try to perform free transform, it keeps prompting me "could not transform because the initial bounding box is empty" and thus cannot be transformed. How can I solve this issue?
Try transforming actual pixel content instead of an empty Layer (or Selection).
Could you please post screenshots with the pertinent Panels (Toolbar, Layers, Options Bar, …) visible?
Check your document for any selections, which may be preventing you from transforming, especially if a selection is on an empty layer.