SourceSafe doesn't support branching of projects, only files. Branching a file would work like this (tested by adding to the SourceSafe.bld sample, copy and paste the text below into VBP):
<step action='SourceSafe' type='0'>
<AutoLocate type='11'>-1</AutoLocate>
<Comments>Branch test</Comments>
<CompareOpt type='3'>2</CompareOpt>
<Database>%SAMPLEDB%</Database>
<LongFilenames type='11'>-1</LongFilenames>
<Operation>Branch</Operation>
<Project>$/Source/FirstVB/First.frm</Project>
<PromptOff type='11'>0</PromptOff>
<Recurse type='11'>0</Recurse>
<ShowFilesOnly type='11'>0</ShowFilesOnly>
<TimeOpt type='3'>1</TimeOpt>
<Username>%SSUSER%</Username>
<WriteOpt type='3'>1</WriteOpt>
<description>Branch Test</description>
<indent type='3'>1</indent>
<name>Branch</name>
<outputfrom type='3'>1</outputfrom>
</step>