SEVERE: Unable to create DT soa repository. MDS File Store root can not be a file! Specify a valid folder name.

On a fresh SOA 12c installation it may happen that while opening an existing 12c application in Jdeveloper you encounter an error like this -

SEVERE: Unable to create DT soa repository
java.lang.Exception: MDS File Store root can not be a file! Specify a valid folder name.
t oracle.tip.tools.ide.soamds.adapter.MDSHelper.createMDSProvider(MDSHelper.java:455) 
at oracle.tip.tools.ide.soamds.adapter.MDSHelper.createResourceCatalogMDSConnection(MDSHelper.java:428) 
at oracle.tip.tools.ide.soamds.addin.SOAMDSAddin.findOrCreateDesignTimeSOAAppsSharedConnection(SOAMDSAddin.java:139) 
at oracle.tip.tools.ide.template.utils.MDSUtils.initMDS(MDSUtils.java:356) 
at java.lang.Thread.run(Thread.java:748) 
Caused by: javax.naming.NameNotFoundException; remaining name 'SOA_DesignTimeRepository' 
at oracle.adf.share.jndi.ContextImpl.findObject(ContextImpl.java:773) 
at oracle.adf.share.jndi.ContextImpl.lookup(ContextImpl.java:159) 

The root cause for this error may differ based on what exactly you are trying to do. My case is described below -

1. Installed fresh SOA 12c binaries with JDeveloper 12.2.1.3.
2. Open an existing SOA 12c application in newly installed JDeveloper.
3. Immediately after opening the application a window will show giving 3 options - save and exit, exist without saving and continue.
4. Whatever option select the JDev will continue running and there will error messages in the logs as mentioned above.

Solution -
In 12c Jdevleoper a SOA design time repository is required and it gets created automatically when you create a new SOA project. Refer this -

https://docs.oracle.com/middleware/1221/soasuite/develop/GUID-DD86519A-11AC-4C80-B746-996039C41DD0.htm#SOASE88097

In my case I opened an existing 12c application and some how SOA design time repository doesn't get created (not sure if it is supposed to be created).

To fix this close the application and then create new SOA application say "TestApplicaton" with a project having a bpel. With that Jdev will create a SOA design time repository. Close the TestApplication and reopen your application. This should not present any error window or error in the logs.

I am not sure if this is a bug but hopefully Oracle will publish some document or support article on this.