Arguments::set_sysclasspath function call set_value method of SystemProperty class which copy passed value. In several code paths memory is allocated for string and then this string is passed to Arguments::set_sysclasspath. Therefore allocated string should be freed after calling Arguments::set_sysclasspath function.

Here a list of function where memory must be freed:
1) hotspot/src/share/vm/runtime/arguments.cpp module:
jint Arguments::finalize_vm_init_args(SysClassPath* scp_p, bool scp_assembly_required) {
...
  if (scp_assembly_required) {
    // Assemble the bootclasspath elements into the final path.
    Arguments::set_sysclasspath(scp_p->combined_path());
  }
...

combined_path() allocate memory for path and then pass resulting string to the set_sysclasspath function.

2) hotspot/src/share/vm/runtime/os.cpp module:

bool os::set_boot_path(char fileSep, char pathSep) {
...
  char* jimage = format_boot_path("%/lib/modules/" BOOT_IMAGE_NAME, home, home_len, fileSep, pathSep);
  if (jimage == NULL) return false;
  bool has_jimage = (os::stat(jimage, &st) == 0);
  if (has_jimage) {
    Arguments::set_sysclasspath(jimage);
    return true;
  }
...
  char* modules_dir = format_boot_path("%/modules", home, home_len, fileSep, pathSep);
  if (os::stat(modules_dir, &st) == 0) {
    if ((st.st_mode & S_IFDIR) == S_IFDIR) {
      sysclasspath = expand_entries_to_path(modules_dir, fileSep, pathSep);
    }
  }

  // fallback to classes
  if (sysclasspath == NULL)
    sysclasspath = format_boot_path("%/classes", home, home_len, fileSep, pathSep);

  if (sysclasspath == NULL) return false;
  Arguments::set_sysclasspath(sysclasspath);

  return true;
}

format_boot_path and expand_entries_to_path functions allocate memory for path, thus 'jimage', 'modules_dir' and 'sysclasspath' should be freed.