Note to self
I got this weird error when I was trying to change local output folder of my project
Main application must be in the list of application paths.
Changing it from bin-debug to anything else would simply not allow me to click OK.
Solution is quite simple, you have multiple applications in one project (ie. FlexUnitApplication is a good example).
To solve the issue make sure one of the applications is set to default apps.
Right click on your main class and select “Set as default application”.
Go to properties and change your output, Ta daaaa!