The issue reproduces when

1. The OS is Windows Server 2003 (it is likely that whole windows family affected)
2. PATH environment variable defined in lower or mixed case e.g. "Path"
3. Job uses non-default JDK.
4. Hudson 1.153 (did not try other versions)

Under these conditions instead of appending $JAVA_HOME/bin to existing path
hudson defines new env variable in upper case, which contains $JAVA_HOME/bin ONLY.

This may cause various problems downstream. One that I faced is that Websphere
does not start, as windows stuff is not in PATH.