regarding war overlays, we have some minor problems, which is really related to WTP itself, not m2e-wtp. This is addressed in a server publish configuration, and in a resource change listener to call server's publish on resource change.
But we have faced a much bigger problem, which is also related (I think) to WTP. Somehow, if server is in autopublish mode, some overlaid resources are deleted. Just editing a .js file, saving it, the server publishes it, but suddenly, the whole webapp is broken. Only a clean on the server can resolve the problem, a simple publish won't fix the missing resources.
I'm just wondering, if you review it, it can be part of the main m2e-wtp source. There is a flag in Maven WTP Integration preferences page to switch between the two modes.
It has some drawbacks: cannot handle excludes and includes. War overlay artifacts not present in workspace exploded without web.xml and WEB-INF/lib content, but nothing more (well this can be handled on project level, but we decided to extract war overlay artifacts under the plugin's state location... maybe not a goodÂdecision). Well it fits for us... with lots of overlays.
We are also just testing this configuration, but I'm curious about your opinion.
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