000435 : Output must be a feature dataset because input is a feature dataset.

Description

The Project tool can alter the spatial reference of a feature dataset. However, as the input is a feature dataset, the output must be a feature dataset. If the output name contains a dot (fds.shp), then the tool modifies the name to the second part (shp) only.

Solution

Specify a feature dataset as output. The output workspace should be a geodatabase.