Thanks for the details! Interesting timing as in our next release, we are cleaning up the user experience when it comes to project-level validation. In your instance, I would surmise that you are getting hit by XSL and other validators from Webtools still running on node_modules.
The actual pop-up you were getting about validation wasn’t to just validate in the moment but actually turn on project-level validation. This is an area we are making changes in the upcoming update to make it much clearer and have project-level validation on by default as you would expect.
To enable it, you would add the following buildCommand into the buildSpec for your project:
<buildSpec>
<buildCommand>
<name>com.genuitec.eclipse.code.ui.codeBuilder</name>
<arguments>
</arguments>
</buildCommand>
</buildSpec>
If you don’t want webtools doing any validation of random XSL and similar files, you can simply uncheck Validation for this project.