There is something wrong with your setup if the webapp only works when exploded. The standard for JEE doesn't even mention an option for exploded WARs as far as I know, and the effective operation should be the same in either event unless someone tried to either write data into the WAR directory subtree or use filesystem calls to access WAR resources. Neither of which are good practice.
Your sample command calls a shell script named "standalone.sh". We don't know what it does, but presumably it either calls a web server or does a brute-force jam of the WAR into Wildfly's webapps directory. Without knowing details I cannot say why deployment apparently fails.
The secret of how to be miserable is to constantly expect things are going to happen the way that they are "supposed" to happen.
You can have faith, which carries the understanding that you may be disappointed. Then there's being a willfully-blind idiot, which virtually guarantees it.
I have checked the server.log file and observed that war is getting deployed.
Starting deployment of "Application1.war" (runtime-name: "Application1.war") Starting deployment of "Application2.ear" (runtime-name: "Application2.ear")
Registered web context: '/app1' for server 'default-server' Registered web context: '/app2' for server 'default-server'
Deployed "Application1.war" (runtime-name : "Application1.war") Deployed "Application2.ear" (runtime-name : "Application2.ear")
I am dropping the war file in the following path