True this is the directory for JSP compiled classes. For example if the JSP's are in example directory, this work directory contains a directory localhost_8080%2Fexamples and stored the JSP compiled classes here. HTH
If I am not wrong, it is like 'scratch directory' where the jsp's class files are stored. In early JSDK it was called as scratch directory and we can define the dir in one of the configuration files, and if I remember correct, there is a parameter 'keepgenerated=true', which means keep the .class files in scratch dir or delete them.