Of the options you mentioned:
If common.jar is placed directly in the EAR file, then other modules must reference common.jar in the Class-Path of the respective META-INF/MANIFEST.MF files. I suspect RAD is doing this for you.
If common.jar is placed inside the EAR using the lib folder, then either application.xml must not exist (which implies EE 5 or later), or if it exists, it must contain version="5" or later.
Libraries cannot be placed literally inside EJB JARs. This approach can only work if the contents of common.jar are merged into the EJB JAR.