See the screenshot attached - 7.0.3 requires a directory specified as Web module exploded directory to be existing.
How come ? I think it's possible for me to say "When building a Web module - use /a/b/c as exploded dir" even though /a/b or /a/b/c may not be existing.
I won't be able to point to that folder but I think I should be able to specify it manually.
Same way it happens in various installation applications (on Windows) when one specifies a non-existing folder. The application either creates one silently or offers user to create it. It doesn't stop just because the folder specified isn't there.