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In my system, I have Modustoolbox 2.2 with 2.2.1 patch. I created a workspace, Clicked on "New Application", selected CYW920719B2Q40EVB-01 platform and selected empty BTSDK application. After creating this application, I clicked on the build option and it simply worked (compiled) for me without any issue. I hope you have also done the same steps.
I would like to know few things:-
Do you have multiple versions of modustoolbox (v2.2 and previous as well) installed in your system.
May I know which BTSDK version are you using? (Check the "version.xml" in empty BTSDK application which is imported and also in "mtb_shared\wiced_btsdk\dev-kit\bsp\TARGET_CYW920719B2Q40EVB-01\release-v2.x.x\version.xml")
Please try to create a new fresh workspace using the latest Modustoolbox 2.2 and import the empty BTSDK app once again as I mentioned above (Click on "New Application" from "quick Panel" menu). Also, please Clean and Build the application.
Did you try to install the latest Modustoolbox 2.2.1 patch? If not please install it.
Could you please .zip your empty BTSDK application and share it with us? We will try to reproduce the issue with the same app in our systems.