$ java Hi

classpath has always been default to PWD.

With modules:
$ java -p mods -m m1/p.Hi

-classpath option and CLASSPATH environment variable are not set. The current implementation defauts class path to PWD. In other words, the builtin application class loader will search classes from PWD.

The VM always sets "java.class.path" to an empty string for the following cases
1. -Djava.class.path is not set
2. -Djava.class.path is set to no value (without = sign)
3. -Djava.class.path= explicitly set to empty value

Automatic modules are used to bridge to the class path and it might expect that $PWD is the class path.