Needed to use BB_HOME/log/- as the value for action attribute for the
permission that allows the B2 to write to a log file under the custom
folder.  The part I was missing was "/-" which by the Java API

A pathname that ends in "/*" (where "/" is the file separator character,
File.separatorChar) indicates all the files and directories contained in
that directory. A pathname that ends with "/-" indicates (recursively)
all files and subdirectories contained in that directory. The special
pathname "<<ALL FILES>>" matches any file.