I ran into this trying to create a TestNG test as a module.

mkdir -p m/p

cat > Driver.java << EOF
/**
 * @test
 * @build m/*
 * @run testng/othervm m/p.Tests
 */
EOF

cat > module.info.java << EOF
module m {
    requires testng;
    exports p to testng;
}
EOF

cat > p/Tests.java << EOF
package p;
import org.testng.annotations.Test;
@Test
public class Tests { }
EOF

The tests runs, no issues. Looking at the .jtr file, I see the boot layer is:

Boot Layer
  add modules: m1 testng
  module path: /d/JTwork/tmp/Driver.d/modules
               /d/JTwork/modules

Now create a directory as a sibling to m, the directory can be empty. jtreg fails with:

  java.lang.module.FindException: Module testng not found, required by m1

The jtr file this time is:

Boot Layer
  add modules: m1
  module path: /d/JTwork/tmp/Driver.d/modules

Note that testng has disappeared from the list of modules to add.