Selections of target project in the New Model Wizard are not used when creating a Web Service Model. This originates with: https://issues.jboss.org/browse/JBEDSP-762
1. Right click on the project and select New -> Metadata Model.
2. Create a file name for the new model.
3. Choose the "Web Service" metamodel and make sure the "Virtual Model" model type is selected.
4. Select the "Build from existing WSDL file(s)" model builder.
5. Click "Next."
6. Choose a WSDL. Click next, next, next.
7. In Schema Workspace Location Selection, change the Folder to another project, click apply.
8. Click "Next", and "Finish".
The XSD is still created in the same project, not in the one selected in step 7.