The search variable doesn’t seem to be replaced in your example.
Can you work around it by building the XPath as a string before executing it? This worked for me where this.Name was a parameter passed to the Java action as a String.
Core.createXPathQuery(String.format("//MyFirstModule.Entity[contains(Name, '%s')]", this.Name)) .execute(getContext());
Only think I see missing is the context not being passed to the execute function, but I bet that is just a mistake in your error code. Did you try removing the extra space? Or even executing it without the setVariable and just with a hardcoded value?