I've found a bug in the jpackage tool early access which I obtained from https://jdk.java.net/jpackage/. The issue is that the icon path is incorrect in the generated desktop entry file.
Steps to reproduce the bug in Ubuntu are as follows:
I have a project in which I create an app image with the command:
jpackage create-app-image --output build/jpackage --name modsman-gui --module-path build/jlinkbase/jlinkjars --module modsman.gui/modsman.gui.MainKt --runtime-image build/image --icon icons/linux.png