I have the exact same problem with a Flex (non Air) project. The release build always goes to "/Workspace/Project Name/" but I want it in "/Workspace/Projects/Project Name/bin-release/". It seems impossible.
I was thinking of it as a Flash Builder bug.
However, behavior is similar but not identical. In my Flex (non AIR) project case export works perfectly.
I am suspecting something configuration related. But, I haven't played at all with eclipse configuration (I never do for safety and uniformity etc.)
I ended up thinking of it as a bug
Any other ideas?
I got it solved for my project. I noticed the "Flex Server" settings page gave errors in the error log. "Could not set project description"
Since I use a custom class for communication I set the server type to "none" (was PHP). Then I removed all output folders from the filesystem previously used for building and all linked folders to them in the Eclipse project. After reloading Eclipse it worked.