Hey Trez,
We here in the Community Support branch of Cloud Platform Support usually monitor threads like these to see if there are unresolved questions from community members. I just wanted to jump in here to clarify that yes, for
J2EE structured applications in WAR format, the deployment format for Java App Engine,
WEB-INF/lib is where your jar files should be, and subdirectories will not be scanned for jars. There are numerous threads around the internet discussing this, such as
this excellent Stack Overflow Q&A. If you'd like to have a more custom deployment environment than App Engine, consider
Compute Engine or Managed VM
Custom Runtimes.