Resolution:
According to our engineering research  "Obfuscate() is deprecated and
thus you should not use obfuscate.exe to obfuscate the password.

However there are two workarounds:
Workaround 1:
Encrypt (!#) instead of obfuscate(#).

You should put #!&ltpassword> on tibco.clientVar.&ltpassword> field in bwengine.tra file,
and then run the obfuscate.exe. The obfuscate.exe will then encrypt with the password
to right format.

Workaround 2:
1) first of all, create a JDBC Connection (in UI) and fill in
    driver, location/url, login and password. Test connection
    and make sure it works. Create a new process with one
    JDBC Query activity. Select this JDBC Connection shared
    config for this JDBC Query activity, enter "select * from
    &ltyourTable>" sql statement and then "Fetch" its output schema.
    Save the project.

2) edit c:\myProject\JDBC Connection.sharedjdbc.
    copy encryptedValue from &ltpassword&gtencryptedValue</password>
    and then paste it into tibco.clientVar.pw=encryptedValue in
    bwengine.tra file.

3) now, change "password" field of JDBC Connection (in UI)
    to use a global var, %%pw%%. Also define such global
    var with whatever value. Save the project.

4) Modify bwengine.tra file and add the following so to ensure the file is picked:
tibco.env.APP_ARGS=-p C:/TIBCO/bw/5.1/bin/bwengine.tra

5) run it now and bw engine should be able to run the
    process without any problems.

Note, you don't need to run obfuscate.exe in this work-around.