The Dev Mode Wildfly instance runs in it's own JVM so you must use the following system property in the extraJvmArgs to pass java opts to it: errai.jboss.javaopts
You can read about all the JBossLauncher properties here.
Thanks a lot, Max!
You solved my issue!
So the default values are flawed in the tutorial. I think it needs a fix, otherwise newbies will be frustrated like I was.