Symptoms
SharePoint 2013 library which was created using XML Form Library template has K2 Application icon, but on attempt to "appify" it the following warning is displayed:
"The current library is not supported by K2 for SharePoint. Select a different library for creating a K2 Application," and library can not be “appified” as a result.
Diagnoses
There is a list of Supported and Unsupported SharePoint List and Library Templates for K2 for SharePoint.
According to this list K2 for SharePoint doesn't support XML Form Library template (and certain other types, please refer to the list mentioned above).
Resolution
In case when library template is not supported by K2 for SharePoint app you either have to re-create your library using supported template or revert to alternate ways to achieve desired functionality. For example when changing library template is not an option but you need to start a workflow when document is added into this library you may use SharePoint event receiver to achieve this type of functionality.
