Resolution:
In order to facilitate shortName-based lookup for a class, SDK uses an adapter instance description object, which is present in the private section of each adapter instance. The SDK forms a global name by prefixing each element in the Metadata load URL (defined under &ltgenericAdapter>/Advanced/Metadata URLs/ folder) first, then the Metadata Search URL.  Which is used to attempt loading classes from TIBCO Repository.

The Adapter SDK checks the URL listed under the Metadata Search URL only when the class description cannot be located in the class registry via the Global Name prefixed with Metadata load URL.

For Example:
Metadata Search URL= /tibco/public/class/ae/myfolder
Metadata load URL ("Metadata URLs" folder) = /tibco/public/class/ae
Short Name = GreetingClass

The first Global Name used by SDK to locate the class description will be:
/tibco/public/class/ae/GreetingClass

If no such class description exists, SDK will then use:
/tibco/public/class/ae/myfolder/GreetingClass

What is the "Metadata Search URL" in the Designer's Startup tab and how is it used in Adapter SDK?