I'm a little confused as to which configuration is problematic.
If the problem lies in with the embedded server configuration, check whether the Application element in the Configuration.xml file has an authenticationMethod attribute, and if so whether it so, verify that it is set to JDBC rather than None.
If the problem lies in the standalone server configuration, I suggest you verify that the Realm element is not commented out.
Sorry if any (or all) of this is stating the obvious :-)
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