Harish, that's correct. The provided test-project is old. This had a default widget in the project, which is missed because you rename the widget using the generator.
I have not updated the test-project yet, but I don't think we need that one anymore. It's old (5.18) if I'm correct and only covers some standard test-cases, which are not applicable in a lot of cases. Currently I am working on a new widget-generator (https://github.com/JelteMX/generator-mendix-widget & https://github.com/JelteMX/widget-base) which do not have a test-project inside. The upside of this setup is actually writing widgets in ES6 (which is advanced, but very effective)
This is caused by the fact that there is no WidgetName.mpk file in your /widgets/ folder. If you have used the generator, it could be that it's not compiling to that directory.
To prevent this, I always set my testProjectFolder in package.json to "../../" and I put a widget_src folder in the project directory.