Why isn't the log file entry as coded above working? Is it by design?
Yes. The current version of TurboFloat Server only support absolute paths for the log file. We do plan on making the log file work relative paths. It just hasn't been written yet.
It will come when we release the Linux / Mac versions of the TurboFloat Server.
Side note: the log file was being written, but if you were using the TFS as a Windows Service then the log file is being written to the "current directory". Which I believe is C:\Windows\System32. But we will fix this so that a "relative" log file path will be relative to the TFS.exe and not to the "current directory".