Throws needs to be added for StandardJavaFileManager.setLocation() API.
setLocation will throw IllegalArgumentException when the list contains files for the locations, which only supports directories like SOURCE_OUTPUT.

Please see the testcase :
<testcase>
import java.io.File;
import java.util.Arrays;
import java.util.List;
import javax.tools.JavaCompilerTool;
import javax.tools.StandardJavaFileManager;
import javax.tools.StandardLocation;
import javax.tools.ToolProvider;

public class Foo {
    public static void main(String[] args) throws Exception {
        JavaCompilerTool jct = ToolProvider.getSystemJavaCompilerTool();
        StandardJavaFileManager sjfm = jct.getStandardFileManager(null);
        File file = new File("sjfmTemp.java");
        file.createNewFile();
        List<File> newFiles = Arrays.asList(file);
        StandardLocation s1 = StandardLocation.valueOf("CLASS_OUTPUT");
        StandardLocation s2 = StandardLocation.valueOf("SOURCE_OUTPUT");
        try {
                sjfm.setLocation(s1, newFiles);
        } catch(IllegalArgumentException ex){
            System.out.println(ex.getMessage());
        }
        try {
                sjfm.setLocation(s2, newFiles);
    } catch(IllegalArgumentException ex){
            System.out.println(ex.getMessage());
        }
        file.deleteOnExit();
    }
    
}
</testcase>

When trying to add files for CLASS_OUTPUT and SOURCE_OUTPUT, compiler will throw IllegalArgumentException as expected. I think same needs to added in the spec.
Pared down test case:

import java.io.File;
import java.util.*;
import javax.tools.*;

public class Test {

    public static void main(String[] args) throws Exception {
        JavaCompilerTool jct = ToolProvider.getSystemJavaCompilerTool();
        StandardJavaFileManager sjfm = jct.getStandardFileManager(null);
        List<File> newFiles = Arrays.asList(new File("Test.java"));
sjfm.setLocation(StandardLocation.CLASS_OUTPUT, newFiles);
sjfm.setLocation(StandardLocation.SOURCE_OUTPUT, newFiles);
    }

}