How do I exclude base application files from the installler?

I am building a launcher that should download and extract the necessary files and not include any base application files itself in the installer. I have this in the installer.ini file

[CopyLocalFiles]
CopyLocalFiles=false

[DownloadFiles]
DownloadURL=http://example.com/Setup.exe
... etc

When I look inside the paf.exe file created by the installer, the base application files are still being included. (i.e those inside the X:\PortableApps\AppNamePortable\App\AppName folder).

What am I doing wrong? How can I exclude these files from the installer?

Thanks