I finally got some answers from PTC on this one. Here's where we stand
with the "Read DB" issue. I opened call #6586146 which led to PTC
acknowledging the problem, but stated "this is intended functionality".
The XML tool files were not intended to go into sub-folders only at
"pro_mf_tprm_dir" level. It was recommended that an enhancement request
be submitted.
FYI, Enhancement Request #6596086 Has Been Submitted.
Mike Bills