Matt, I've tried using the same set up as in your screen shots and I am still getting the 99999 error. Are there any constraints on the number of photos? Or the size? I have 40 jpgs, all in the 50-100k size. They all have lat-longs. I've tried with the input folder in various spots including the desktop.
Does it matter where your output GeoDatabase lies? Mine is on an external hard drive, but I've tried just letting it go to the default gdb (as in your example) and it still throws the same error.
I'm using 10.2, and I've attached a photo.