Yeah me and cmh found that out the hard way. It seems that it will only except lgps. You could try to trick it into thinking it is one by making a sound.lgp folder and see if that works.
It's not necessarily just .lgps, I have gotten it to work with the sound folder for the updated FX mod bootleg installs. Some folders aren't supported though, or I at least haven't found how to correctly setup their directories. For example all the Aali mod path folders work, the sound, and kernel folders as well. I couldn't get the scene.bin file too work though, as it also goes into a folder called Battle (where the battle.lgp actually goes). So I think I was just having trouble getting it to differentiate it from the Aali mod path Battle folder. Using extra root directories (in that case data\battle) didn't seem to work, or as far as I can tell. I don't know everything that was done with Genesis's mod. It really is too bad Iros didn't release the source code.
I am wondering about tricking it into activating the counter script to randomize the sound though. I'm not sure if 7H only swaps files that the game is actually loading, or everything we place into a mod file based on the script. For example if we added a variable to load the script based on field id or ppv as well.