It's FQN.  An example:
<retryable-exception-classes>
                <include class="java.io.FileNotFoundException"></include>
                <include class="java.lang.RuntimeException"></include>
                <include class="java.lang.Exception"></include>
                <exclude class="java.lang.IllegalStateException"></exclude>
                <exclude class="java.io.IOException"></exclude>
            </retryable-exception-classes>

yes, we will have the caller obtain BatchEnvironment.getClassLoader(), and pass it in (except the unit test).  This method is only used in a couple of places.