Thanks Max,
Right. Somehow, it's the presence of the execution environment and or the associated server that changes the project creation behavior (when that runtime is selected at project creation time). https://community.jboss.org/servlet/JiveServlet/downloadImage/2-647040-17786/450-443/props1.PNG
No Java 7 currently installed. I can replicate the behavior in a new workspace:
1. No JBoss runtime configured, no JBoss server defined: When creating a new Dynamic Web Project in this state, the Project Configuration defaults to "Default Configuration". The generated project selects "Use compliance from execution environment 'JavaSE-1.6' on the Java Build Path. The Java compiler setting is 1.6.
2. JBoss runtime configured, JBoss server defined. When creating a new Dynamic Web Project, I set Target runtime = 'JBoss 7.1 Runtime'. The project Configuration automatically switches to 'Default Configuration for JBoss 7.1 Runtime". The project Java Compliance setting is 1.7. 'Use compliance from execution environment on the Java Build Path' is disabled. 'Use default compliance settings' is checked. https://community.jboss.org/servlet/JiveServlet/downloadImage/2-647040-17787/450-452/props2.PNG
