> (The specification says that INDEX.LIST is preferred if it exists)

Just tried "jar -i" with java-picard after manually editing the class path to be much longer:

INDEX.LIST contains:

JarIndex-Version: 1.0

picard2.jar
picard
picard/analysis
picard/analysis/artifacts
picard/analysis/directed
picard/analysis/replicates
picard/annotation
picard/cmdline
picard/cmdline/programgroups
picard/fastq
picard/filter
picard/fingerprint
picard/illumina
picard/illumina/parser
picard/illumina/parser/fakers
picard/illumina/parser/readers
picard/illumina/quality
picard/metrics
picard/pedigree
picard/reference
picard/sam
picard/sam/markduplicates
picard/sam/markduplicates/util
picard/sam/testers
picard/sam/util
picard/util
picard/vcf
picard/vcf/MendelianViolations
picard/vcf/filter
picard/vcf/processor
picard/vcf/processor/util

/gnu/store/3gq6vpqplak9aj01ya4gsfr2f02nfv0v-java-htsjdk-2.10.1/share/././././././././././././././././././././././././././././././././././././java/htsjdk.jar
htsjdk
htsjdk/samtools
htsjdk/samtools/apps
htsjdk/samtools/cram
...

No wrapping done anywhere (I added ./././ to the manifest in order to make the line very long).