File watcher generates empty file from less

Hi, I just started using PHPStorm and I came across an annoying problem - as fas as I looked it up my file watcher is properly configured but running it generates an empty app.css file out of the source less file :/

Here is the config:

<TaskOptions>
  <TaskOptions>
    <option name="arguments" value="--no-color $FileName$ $ProjectFileDir$/app/$FileNameWithoutExtension$.css" />
    <option name="checkSyntaxErrors" value="true" />
    <option name="description" />
    <option name="exitCodeBehavior" value="ERROR" />
    <option name="fileExtension" value="less" />
    <option name="immediateSync" value="true" />
    <option name="name" value="test Less" />
    <option name="output" value="$ProjectFileDir$/app/$FileNameWithoutExtension$.css" />
    <option name="outputFilters">
      <array>
        <FilterInfo>
          <option name="description" value="lessc error format" />
          <option name="name" value="lessc" />
          <option name="regExp" value="$MESSAGE$\Q in \E$FILE_PATH$\Q on line \E$LINE$\Q, column \E$COLUMN$" />
        </FilterInfo>
      </array>
    </option>
    <option name="outputFromStdout" value="true" />
    <option name="program" value="/usr/local/bin/lessc" />
    <option name="scopeName" value="Project Files" />
    <option name="trackOnlyRoot" value="false" />
    <option name="workingDir" value="$FileDir$" />
    <envs />
  </TaskOptions>
</TaskOptions>

Problem is generated by     <option name="output" value="$ProjectFileDir$/app/$FileNameWithoutExtension$.css" />

If I run similiar command form terminal (/usr/local/bin/lessc --no-color app.less /var/www/angular/test/app/app.css, being in the app.less dir) OR if I remove the "Output paths to refresh" the file is properly generated, otherwise it is always generated empty. Technically I could use it w/o "Output paths to refresh" but I assume its there for a reason (which I admit I don't quite understand - is that used for reloading the file on change??)

Regards,

Lech