I'm running the equivalent of 'pretext build web' (my targets have different names) with CLI 1.7.4 on a clean build: generated-assets and output started out empty.
It detected that assets needed to be generated ("This target needs a webwork-representations.xml file, but it wasn't found (possibly manually deleted?). Generating it now."), and got to work on the webwork representations. Everything went through successfully, with no errors or warnings.
It ended with the usual 'removing temporary directory', and then went immediately to "Now generating webwork representation".
After the second pass it moves on to Asymptote, so it's at least not an infinite loop.