where does the value for this 'geowave.classpath.jars' get in the job configuration in the first place?

I'm able to pass it in from the invoking application. For example:

final Configuration conf = new Configuration();
final String[] hdfsPaths = new String[] {...};
conf.setStrings(KDEJobRunner.GEOWAVE_CLASSPATH_JARS, hdfsPaths);

final String[] args = new String[] {...};
ToolRunner.run(
    conf,
    new KDEJobRunner(),
    args);

So my application will upload the JARs to HDFS and just pass the paths in through the configuration.