Currently, DynamicLoginConfig service as explained in the following wiki:
http://wiki.jboss.org/wiki/Wiki.jsp?page=DynamicLoginConfig

looks for the login-config.xml via ClassLoader.getResource.

So if the customer has a valid usecase of placing the login-config.xml to be something like:
file:/C:/cygwin/home/asaldhana/9149/login-config.xml

Then the error would be:
===================================================================
14:34:56,531 WARN [ServiceController] Problem starting service jboss:service=Dy
namicLoginConfig
org.jboss.deployment.DeploymentException: Failed to find authConf as resource: f
ile:/C:/cygwin/home/asaldhana/9149/login-config.xml
at org.jboss.security.auth.login.DynamicLoginConfig.startService(Dynamic
LoginConfig.java:155)
at org.jboss.system.ServiceMBeanSupport.jbossInternalStart(ServiceMBeanS
upport.java:272)
at org.jboss.system.ServiceMBeanSupport.jbossInternalLifecycle(ServiceMB
eanSupport.java:222)
at sun.reflect.GeneratedMethodAccessor2.invoke(Unknown Source)
at sun.reflect.DelegatingMethodAccessorImpl.invoke(DelegatingMethodAcces
sorImpl.java:25)
at java.lang.reflect.Method.invoke(Method.java:585)
at org.jboss.mx.interceptor.ReflectedDispatcher.invoke(ReflectedDispatch
er.java:141)
============================================================================