I think I found a project references wizard bug using current wix 4318 drop.
To repro take a sln and place various csproj files in solution folders, e.g. <slnroot>\ProjectGrouping1\ProjectA\ProjectA.csproj.</slnroot>
Now in your <slnroot>\Setup\Setup.wixproj add a reference to ProjectA at which point the Setup.wixproj contains</slnroot>
<ProjectReference Include="..\ProjectGrouping1\ProjectA\ProjectA.wixproj">
<Name>ProjectA (ProjectGroup1\ProjectA)</Name>
<Project>{<ProjectA.csproj Guid}</Project>
<Private>True</Private>
</ProjectReference>
Now in some wix file make a reference to
<file id="user-content-Company.Technology.ProjectA.dll" name="Company.Technology.ProjectA.dll" source="$(var.ProjectA.TargetPath)"></file>
Now when you compile it throws compiler errors stating that it does not know anything about $(var.ProjectA.TargetPath). The fix is to open Setup.wixproj in notepad and remove the " (ProjectGrouping1\ProjectA)" suffix that was included in the <name> element entry. After that the compile works.</name>
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