The module command ony works on a local AS instance. If you are trying to install a module on a remote file system it won't work.
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in this case it is not remote or local, but in domain mode this feature is not supported.
The trick is to use that command without '-c' or even if the domain/host is down. In this case the module is added
For domain mode there is a upcomming feature to 'patch' the server, this can be used to add modules in a domain to distrubute the module.
I'm fairly certain it will work even in domain mode if your JBOSS_HOME points to a local file system. The module command looks at JBOSS_HOME and nothing else. So you need to connect CLI to some server to get started then install to JBOSS_HOME.
The JBOSS_HOME does not need to be set.
If you call the command local on the system it will work, but only disconnected or if you run the server in standalone mode.
If you connect and the server is a domain the 'module' command is not available, checked with AS7 EAP6.0 and EAP6.1
It work when I run jboss-cli.sh without -c. Good enough for me.