yes it is by design.

deploy /tmp/testmdb.jar --server-groups=server-group-two --name=testmdb

what this does it to deploy file named "testmdb" and because it has no extension, server cannot know what kind of deployment it is and doesn't scan for deployment descriptors.

all you need to change is to use also extension.

so your command should be

deploy /tmp/testmdb.jar --server-groups=server-group-two --name=testmdb.jar

why your second command works is because by default name is the name of original file you uploaded.