With JDK-8114827 "JDK 9 multi-release enabled jar tool"  jar tool ignores second '-C <dir> .' folder, i.e.:
jar -cf MyJar.jar -C <folder1> . -C <folder2> .

In this case classes from <folder2> subfolders are absent in the MyJar.jar file.

Looks like the problem in the following piece of code(src/jdk.jartool/share/classes/sun/tools/jar/Main.java):
    void expand(File dir,
                String[] files,
                boolean isUpdate,
                Map<String,Path> moduleInfoPaths,
                int version)
        throws IOException
    {
...
            Entry entry = new Entry(version, f);
            String entryName = entry.entryname;
...
            } else if (f.isDirectory()) {
                if (!entries.containsKey(entryName)) {
                    entries.put(entryName, entry);
                    if (isUpdate) {
                        entryMap.put(entryName, entry);
                    }
                    expand(f, f.list(), isUpdate, moduleInfoPaths, version);
                }
            } else {
...

entryname for <folder1> and <folder2> will be the same, i.e. empty. And in this case if (!entries.containsKey(entryName)) { will be false and second(and others) folders are not proceeded.