Logs folder not updating

Please review the location that Openfire reports in the admin console to where it is writing the log files to. You can find that on the log viewer page, as shown below:

When starting from a shell script, make sure to include the following parameter to point at the location of the log configuration file: -Dlog4j.configurationFile=/path/to/log4j2.xml. To modify your example (assuming that the paths that you use are correct):

java -server -jar -Xmx256M \
   -Dopenfire.lib.dir=/usr/local/share/java/openfire/lib \
   -DopenfireHome=/usr/local/share/java/openfire \
   -Dlog4j.configurationFile=/usr/local/share/java/openfire/lib/log4j2.xml \
   /usr/local/share/java/openfire/lib/startup.jar`