I've tried both jsreport versions 3.4.1 (in the starterkit package.json) and the latest 3.6.1 and both work well without error.

Are you sure you followed the guide with starterkit? Especially this config needs to be in your config file
https://github.com/jsreport/jsreport-azure-functions-starter-kit/blob/master/prod.config.json#L12