To reproduce, create a .war directory under the deploy directory and put the following jsp file:

<%
javax.servlet.http.Cookie[] cookies = request.getCookies();
if (cookies != null) {
for (int i = 0; i < cookies.length; i++) {
if ("JSESSIONID".equals(cookies[i].getName()))

{ out.println("Session ID cookie found: " + cookies[i].getValue()); break; }

}
}
%>

And put WEB-INF/jboss-web.xml as well:

<jboss-web>
<use-session-cookies>false</use-session-cookies>
</jboss-web>

Then boot JBoss, hit the jsp file and reload. You'll see the session cookie is enabled.

Tested with AS 5 svn rev 80575, it shows:

2008-11-06 16:22:58,243 INFO [org.jboss.web.tomcat.service.deployers.TomcatDeployment] (main) deploy, ctxPath=/test, vfsUrl=test.war
2008-11-06 16:22:58,244 DEBUG [org.jboss.web.tomcat.service.deployers.TomcatDeployment] (main) Using session cookies default setting

So it seems ignored.

WEB-INF/context.xml works:

<Context cookies="false" />