This is to let all know that the Legacy API has been refactored in Sugar 12.0.0. The documentation has been carried over from Sugar 11 and is incorrect.
The file 'service/core/webservice.php' no longer exists in Sugar 12.0.0 and has been replaced with 'service/core/Webservice.php' notice that the file name is spelled differently.
Additionally, the new file service/core/Webservice.php has no concept of a "custom" directory.
In order to get around these issues, I had to create a custom/service/core/CustomWebservice.php to look into the custom directories.
Matt Marum & Rafael Fernandes this is a bug! This is not documented in the Release Notes or the blog post