Yep, you’re right. I did finally manage to get the karaf wrapper to work with quite a few changes. I added a line to the karaf.bat within the :Execute clause to echo the java.exe command so I could replicate all of the arguments within karaf-wrapper.conf. There may be a more elegant solution to this, but I added each of the openhab arguments as wrapper.java.additional lines. Here is my complete karaf-wrapper.conf which seems to work fairly well
# ------------------------------------------------------------------------
# Licensed to the Apache Software Foundation (ASF) under one or more
# contributor license agreements. See the NOTICE file distributed with
# this work for additional information regarding copyright ownership.
# The ASF licenses this file to You under the Apache License, Version 2.0
# (the "License"); you may not use this file except in compliance with
# the License. You may obtain a copy of the License at
#
# http://www.apache.org/licenses/LICENSE-2.0
#
# Unless required by applicable law or agreed to in writing, software
# distributed under the License is distributed on an "AS IS" BASIS,
# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
# See the License for the specific language governing permissions and
# limitations under the License.
# ------------------------------------------------------------------------
#********************************************************************
# Wrapper Properties
#********************************************************************
set.default.JAVA_HOME=C:\Program Files\Java\jdk1.8.0_111
set.default.KARAF_HOME=C:\openhab2_b4\runtime\karaf
set.default.KARAF_BASE=C:\openhab2_b4\userdata
set.default.KARAF_DATA=C:\openhab2_b4\userdata
set.default.KARAF_ETC=C:\openhab2_b4\runtime\karaf\etc
set.default.OPENHAB_HOME=C:\openhab2_b4
set.default.OPENHAB_CONF=%OPENHAB_HOME%\conf
set.default.OPENHAB_RUNTIME=%OPENHAB_HOME%\runtime
set.default.OPENHAB_USERDATA=%OPENHAB_HOME%\userdata
set.default.OPENHAB_LOGDIR=%OPENHAB_USERDATA%\logs
set.default.PATH=%PATH%;%KARAF_BASE%\lib;%KARAF_HOME%\lib
# Java Application
wrapper.working.dir=%KARAF_BASE%
wrapper.java.command=%JAVA_HOME%/bin/java
wrapper.java.mainclass=org.apache.karaf.wrapper.internal.service.Main
wrapper.java.classpath.1=%KARAF_HOME%/lib/boot/*.jar
wrapper.java.classpath.2=%KARAF_HOME%/lib/wrapper/*.jar
wrapper.java.classpath.3=%KARAF_BASE%/lib/wrapper/*.jar
wrapper.java.library.path.1=%KARAF_HOME%/lib/wrapper/
wrapper.java.library.path.2=%KARAF_BASE%/lib/wrapper/
# Application Parameters. Add parameters as needed starting from 1
#wrapper.app.parameter.1=
# JVM Parameters
# note that n is the parameter number starting from 1.
wrapper.java.additional.1=-Dkaraf.home="%KARAF_HOME%"
wrapper.java.additional.2=-Dkaraf.base="%KARAF_BASE%"
wrapper.java.additional.3=-Dkaraf.data="%KARAF_DATA%"
wrapper.java.additional.4=-Dkaraf.etc="%KARAF_ETC%"
wrapper.java.additional.5=-Dcom.sun.management.jmxremote
wrapper.java.additional.6=-Dkaraf.startLocalConsole=false
wrapper.java.additional.7=-Dkaraf.startRemoteShell=true
wrapper.java.additional.8=-Djava.endorsed.dirs="%JAVA_HOME%/jre/lib/endorsed;%JAVA_HOME%/lib/endorsed;%KARAF_HOME%/lib/endorsed"
wrapper.java.additional.9=-Djava.ext.dirs="%JAVA_HOME%/jre/lib/ext;%JAVA_HOME%/lib/ext;%KARAF_HOME%/lib/ext"
wrapper.java.additional.10=-Djava.util.logging.config.file="C:\OPENHA~1\userdata\etc\java.util.logging.properties"
wrapper.java.additional.11=-Dopenhab.home=C:\OPENHA~1
wrapper.java.additional.12=-Dopenhab.conf=C:\OPENHA~1\conf
wrapper.java.additional.13=-Dopenhab.runtime=C:\OPENHA~1\runtime
wrapper.java.additional.14=-Dopenhab.userdata=C:\OPENHA~1\userdata
wrapper.java.additional.15=-Dopenhab.logdir=C:\OPENHA~1\userdata\logs
wrapper.java.additional.16=-Dorg.osgi.service.http.port=8080
wrapper.java.additional.17=-Dorg.osgi.service.http.port.secure=8443
# Uncomment to enable jmx
#wrapper.java.additional.n=-Dcom.sun.management.jmxremote.port=1616
#wrapper.java.additional.n=-Dcom.sun.management.jmxremote.authenticate=false
#wrapper.java.additional.n=-Dcom.sun.management.jmxremote.ssl=false
# Uncomment to enable YourKit profiling
#wrapper.java.additional.n=-Xrunyjpagent
# Uncomment to enable remote debugging
#wrapper.java.additional.n=-Xdebug -Xnoagent -Djava.compiler=NONE
#wrapper.java.additional.n=-Xrunjdwp:transport=dt_socket,server=y,suspend=n,address=5005
# Initial Java Heap Size (in MB)
#wrapper.java.initmemory=3
# Maximum Java Heap Size (in MB)
wrapper.java.maxmemory=512
#********************************************************************
# Wrapper Logging Properties
#********************************************************************
# Format of output for the console. (See docs for formats)
wrapper.console.format=PM
# Log Level for console output. (See docs for log levels)
wrapper.console.loglevel=INFO
# Log file to use for wrapper output logging.
wrapper.logfile=%KARAF_DATA%/log/wrapper.log
# Format of output for the log file. (See docs for formats)
wrapper.logfile.format=LPTM
# Log Level for log file output. (See docs for log levels)
wrapper.logfile.loglevel=INFO
# Maximum size that the log file will be allowed to grow to before
# the log is rolled. Size is specified in bytes. The default value
# of 0, disables log rolling. May abbreviate with the 'k' (kb) or
# 'm' (mb) suffix. For example: 10m = 10 megabytes.
wrapper.logfile.maxsize=10m
# Maximum number of rolled log files which will be allowed before old
# files are deleted. The default value of 0 implies no limit.
wrapper.logfile.maxfiles=5
# Log Level for sys/event log output. (See docs for log levels)
wrapper.syslog.loglevel=NONE
#********************************************************************
# Wrapper Windows Properties
#********************************************************************
# Title to use when running as a console
wrapper.console.title=openhabb4
#********************************************************************
# Wrapper Windows NT/2000/XP Service Properties
#********************************************************************
# WARNING - Do not modify any of these properties when an application
# using this configuration file has been installed as a service.
# Please uninstall the service before modifying this section. The
# service can then be reinstalled.
# Name of the service
wrapper.ntservice.name=openhabb4
# Display name of the service
wrapper.ntservice.displayname=OpenHabB4
# Description of the service
wrapper.ntservice.description=OpenHab_B4_Service
# Service dependencies. Add dependencies as needed starting from 1
wrapper.ntservice.dependency.1=
# Mode in which the service is installed. AUTO_START or DEMAND_START
wrapper.ntservice.starttype=AUTO_START
# Allow the service to interact with the desktop.
wrapper.ntservice.interactive=false