No, the .project file is supposed to be in your project's root folder. A project's root folder doesn't need to be located in the workspace folder.
With other words, everything is just fine...
The soul is dyed the color of its thoughts. Think only on those things that are in line with your principles and can bear the light of day. The content of your character is your choice. Day by day, what you do is who you become. Your integrity is your destiny - it is the light that guides your way. - Heraclitus