I have a large project with multiple libraries.  I use Git to update an archive to work on between laptop and desktop.  Because of issues with hardware debugging (another thread) and strange openocd versions getting picked up, I am trying to move to a portable solution.  Steps so far:

1) Created a new portable solution with wizard.
2) Copied source files to project folder: 
...repos\FortunnelPortable\arduino-portable\sketchbook\Fortunnel3\Fortunnel3
3)Copied libraries to folder:
...repos\FortunnelPortable\arduino-portable\sketchbook\libraries
4) selected appropriate core, and board (ESP32 Dev Module)

5) try to compile

At this point I start getting compile errors for libraries.

If I find and install the libraries with Library manager, they appear in a different folder outside the arduino-portable hierarchy:
...repos\FortunnelPortable\Libraries

However, the compile still fails to find library.

Questions:
What is the correct procedure to bring libraries into an arduino-portable solution?
Do any of the "Library advanced" options affect this?