"Path for project must have only one segment" when working with Project Archive

I have my workspace here:

e:\test

and I have a Seam project here:

e:\test\sub\Proj
e:\test\sub\Proj-ear
e:\test\sub\Proj-ejb
e:\test\sub\Proj-test

When I create a Project Archive using the default values, everything I try to work with the archive I get this error:

"Path for project must have only one segment"

If my project lives directly in the test folder then it works without errors