Had talked to dmlloyd and figured the issue is with the  mapper.parseDocument(operations, XMLInputFactory.newFacotry().createXMLStreamReader(reader)); line SubsystemParsingUnitTestCase class. And which should be newInstance rather than newFactory. 

Now i modified the code locally, but am getting a new error. This is in Arquillian common container. 

[ERROR] \Praba\Work\Workspaces\jboss-as\arquillian\container-common\src\main\java\org\jboss\as\arquillian\container\common\JBossASDeploymentPackager.java:[59,16] inconvertible types
[ERROR] found   : org.jboss.shrinkwrap.api.Archive<capture#607 of ?>
[ERROR] required: org.jboss.shrinkwrap.api.spec.WebArchive

Trying to find out more why this should be so. Should i be raising JIRA for these things with the possible fixes? what is the process?