VHDL syntax error ---- parser stack overf

The version of quartus should not matter - all you are passing to Quartus is HDL code. So you should be able to try the new version without having to set anything in simulink.

Simulation is done in an HDL simulator like Modelsim (you get a free version from altera too). This simulates the HDL (and will be another compiler check)

But the original error looks like a quartus crash. hence the suggestion to try a newer version of Quartus.