Steps to reproduce

• Install XWiki war without any flavor
• In xwiki.properties, set property "extension.localRepository" to "extension/repository" (marked as the default value):

#-# [Since 2.5]
#-# The directory where extensions are stored after being downloaded.
#-#
#-# The default is extension/repository in whatever is the general persistent directory.
#-# See container.persistentDirectory.
extension.localRepository=extension/repository

• In xwiki.properties, set property "extension.properties" to an empty string to use only the local repository
• Unzip the standard XWiki flavor XIP into the extension repository
• Start XWiki and go through the Distribution Wizard up to the flavor screen

Actual result

• No flavor gets listed in the flavor selection screen while the one deployed locally to the extension repository should be listed.
• When commenting out property "extension.localRepository" and restarting XWiki, the flavor is correctly found.
• Side note: the comment for this property in xwiki.properties refers to "container.persistentDirectory" while it should probably be its successor, "environment.permanentDirectory".