Short answer: Use a none IE browser such as Chrome, Firefox etc.
Looks like there is a bug in the browser detection in the application builder.
What is probably happening is that the builder thinks you are using IE1 instead of IE10.
And IE1 being older then IE7 you get the outdated browser message.
I always start the apex builder from my bookmarks so my browser of choice is already open.
Look at the target of the shortcut you use to open apex.
Try if the url opens in Crome if you put the location of chrome.exe in front of the url.
Something like C:\Users\Owner\AppData\Local\Google\Chrome\Application\chrome.exe http:apex_url
I haven't tried it myself but found the idea searching the web for "start link in specific browser".