In the Eclipse plugins, when we select the option of copy jars to code generated project option in the options wizard page, it tries to copy required jars included in the plugin using the following code.
String eclipseHome = System.getProperty("user.dir");
String pluginLibLocation = eclipseHome+File.separator+UIConstants.PLUGINS+
This means we assume the directory which the currently user is an Eclipse distribution. Therefore the users who are trying the plugin in self hosting mode via codebase will get a IO exception since the path refer by the above code is different from what they currently use. So proper fix would be to use Eclipse infrastructure to get the path.