I found a work around for this.
Use jboss.xml to specify the web context instead of the @WebContext annotation that's faulty.
Sample:
<jboss>
<security-domain>java:/jaas/MyDomain</security-domain>
<webservices>
<context-root>/my-context</context-root>
</webservices>
<enterprise-beans>
<session>
<ejb-name>MyBean_v1</ejb-name>
<port-component>
<port-component-name>MyWS</port-component-name>
<port-component-uri>/MyService</port-component-uri>
<auth-method>MY-AUTH-METHOD</auth-method>
</port-component>
</session>
</enterprise-beans>
</jboss>