Url Path Alias is not working with the "raw value from URL contextual filter"
How have your configured your contextual filter? I have the following configuration and it's working fine for me:


Contextual filters: Has taxonomy term ID
You also need to specify validation criteria for this filter, my setting is:

a) Specify validation criteria = Taxonomy Term
b) Select the correct vocabulary.
c) Set Filter value type to Term name converted to term ID
Create a relationshiop of Content: Taxonomy terms on node

a) Select the correct vocabulary.
b) Set Require this relationship to true


You may also wan't to use Has taxonomy term ID width depth if you have nested terms in your vocabulary.