If "Generate SIO Proxies" command is invoked on Classic Applet Project prior to executing Build command then the command fails with the following message:
"
    [Error] Missing Java Card Runtime Descriptor "META-INF/MANIFEST.MF"
Packager/create FAILED [1 error(s) and 0 warning(s)]

"

though file META-INF/MANIFEST.MF exits in the base project directory (not in build directory).

If the same command is invoked for Classic Library Project without invoking Build command before then packager fails with other message:

"
Packager [v3.0.2]
    Copyright (c) 2009 Sun Microsystems, Inc.
    All rights reserved.
    Use is subject to license terms.

[ INFO: ] Validating Command Line
[ INFO: ] Setting packaging information
[ INFO: ] Package is being created
Usage:  converter  <options>  package_name  package_aid  major_version.minor_version 
OR
converter -config <filename>
                    use file for all options and parameters to converter
Where options include: 
        -classdir <the root directory of the class hierarchy>
                      set the root directory where the Converter  
                      will look for classes
        -i            support the 32-bit integer type 
        -exportpath  <list of directories> 
                      list the root directories where the Converter  
                      will look for export files 
        -exportmap    use the token mapping from the pre-defined export  
                      file of the package being converted. The converter 
                      will look for the export file in the exportpath
        -applet <AID class_name>
                      set the applet AID and the class that defines the
                      install method for the applet 
        -d <the root directory for output> 
        -out  [CAP] [EXP] [JCA]
                      tell the Converter to output the CAP file, 
                      and/or the JCA file, and/or the export file
        -V, -version  print the Converter version string 
        -v, -verbose  enable verbose output
        -help         print out this message 
        -nowarn       instruct the Converter to not report warning messages
        -mask         indicate this package is for mask, so restrictions on  
                      native methods are relaxed
        -debug        enable generation of debugging information
        -nobanner     suppress all standard output messages
        -noverify     turn off verification. Verification is default
        -sign         sign the output CAP file
        -keystore <keystore>
                      keystore to use in signing 
        -storepass <storepass>
                      keystore password
        -alias <alias>
                      keystore alias to use in signing
        -passkey <passkey>
                      alias password
        -useproxyclass 
                      user supplied proxy classes (proxy classes not generated by converter)
        -usecapcomponents
                      user supplied cap components
        -keepproxysource <directory>
                      keep generated proxy source files in specified directory

!!!!SIO-Proxy Generation!!!!
Source for Proxies is generated. To use these sources, Use My Proxies option in Packaging settings of the project must be enabled.

BUILD SUCCESSFUL (total time: 1 second)

"

I.e. in the case of Classic Applets packager fails because neither descriptors nor compiled classes are copied into build dir, and in the case of Classic Library project descriptor is copied, but compiled classes aren't.