I tried it on my own but when I run a “valid” code with processing-java, it does output the java file in the directory specified with --output option.
and even an “invalid” code like below seems to end up with a java file although java compiler aborts with an error
float a = frameRate();
void setup()
{
size(400,400);
background(255,0,0);
}
could you check first with trying compiling a simple sketch (like void setup(){}) to see if it is output as a java file? If not you have issues with the command line. If it outputs, then there may be an issue with your code.