I encountered the same problem.
It seems to be a problem with the path environment variable within Visual Studio.
When I added a “path” statement to the beginning of my build event, it produced the following output:
PATH=
This seems to indicate that the path is empty within the VS build environment.
When I specify the full path to xcopy like this, the problem went away:
%systemroot%\System32\xcopy ...
I’m not sure what caused Visual Studio to lose it’s path.