Package Builder updates file path references in deployed sequence files because the filepaths on a development computer might be different from the filepaths on the test station computer, based on the target locations you specify in the output pane. For example, on the development computer, you might save files in the <Desktop>\TestSystem directory but install files on the test station computer in the C:\<Program Files>\TestSystem directory.
Package Builder updates path references in sequence files to use relative path references that initiate from the Current sequence file directory. If the code module file you reference cannot be found relative to the calling sequence file, such as in the case that you deploy the code module under a different target root directory, Package Builder does not update the paths. Therefore, the test sequence might not execute correctly on the test station computer. Package Builder provides a warning in the Errors and Warnings pane in this case.