The functional-test plugin is not compatible with recent versions of Grails. In particular, the "grails functional-tests" target no longer works. "grails test-app functional:" does still work. For now, the functional-test build has been modified so it doesn't try to run the functional-tests target.
1.4 branch: https://github.com/grails/grails-functional-tests/commit/c0ada73756c1d60ee7e48715c5e32ca8f5a6a032
1.3 branch: https://github.com/grails/grails-functional-tests/commit/a6eeb425905a7463bb762d2d83e4918c5ace73e7
This JIRA is a placeholder to make sure we get back to that.