I am bogged down in a development quagmire over this issue. I like the idea of convertEntity but I can only use with SMPC. Therefore I can only use in SMPC if I only use my beans in a conversation context other wise I get LIES. These rules are extremely tight coupled and rigid, and is making my life hell.
Is there a particular reason why it <s:convertEntity> has been engineered as such?
I'm not certain about this, but I think your issue is addressed here:
http://jira.jboss.com/jira/browse/JBSEAM-1581