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The run.bat command line was no enclosing the JBOSS_ENDORSED_DIRS property in quotes to work correctly with paths with spaces. Edit the run.bat to use the following line:
"%JAVA%" %JAVA_OPTS% -Djava.endorsed.dirs="%JBOSS_ENDORSED_DIRS%" -classpath "%JBOSS_CLASSPATH%" org.jboss.Main %*
Thank you, that solved the problem.