Teiid connection import throws "java.lang.IllegalArgumentException: The supplied model folder refers to an existing non-model project" on Windows

Import-> Teiid designer -> Teiid connection >> source model:
Next button doesn't move to next page of wizard on Windows (both 7, XP), but throws following exception in error log:

java.lang.IllegalArgumentException: The supplied model folder refers to an existing non-model project.
at org.teiid.designer.ddl.importer.DdlImporter.setModelFolder(DdlImporter.java:344)
at org.teiid.designer.teiidimporter.ui.wizard.TeiidImportManager.setTargetModelLocation(TeiidImportManager.java:433)
at org.teiid.designer.teiidimporter.ui.wizard.TeiidImportWizard.init(TeiidImportWizard.java:134)
at org.eclipse.ui.internal.dialogs.WorkbenchWizardNode.getWizard(WorkbenchWizardNode.java:185)
at org.eclipse.jface.wizard.WizardSelectionPage.getNextPage(WizardSelectionPage.java:104)
at org.eclipse.ui.internal.dialogs.WorkbenchWizardSelectionPage.getNextPage(WorkbenchWizardSel
...