System properties specified by -P or --properties aren't propagated to the server instances in domain. Tested on AS 7.0.1 and latest AS7 build from sources.

System properties are propagated to the server instances in domain only when -D is used. For standalone -P and --properties are working properly.

Tested with simple webapp containing just index.jsp with content:

<%
    if (request.getParameter("prop") == null) {
        out.println("Please specify request parameter 'prop'.");
    } else {
        out.println(System.getProperty(request.getParameter("prop"), "property-not-specified"));
    }
%>