After a discussion with the Liberty team I have discovered that if quotes are included in the server.env file they get included in the final variable. To allow environment variables without double quotes to be generated the double quotes should be removed from https://github.com/ibm-developer/generator-ibm-java-liberty/blob/master/generator-liberty/generators/app/templates/liberty/src/main/liberty/config/server.env
To complete this item all existing environment variables that require double quotes will need to have them added to the config.js file where they are declared.