Ok so… The problem is indeed in the registry but I am still really confused.
I tried to use an older reg file I had from like 2 years before, but the issue remained, WD still crashed.
I managed to make it work only when I deleted the whole wdisplayftp.ini from regedit.exe but now all my settings are lost. At least we made some progress.
Question now is how can I restore my old settings without crashing?
I am trying to find inside the registry what part is responsible for the crash and delete only that.