Not very much info to go on (the version number of the module that you're using would be good, e.g. perl -MApp::Prove -le 'print $App::Prove::VERSION'), but:

Perhaps the arguments prove -r test/ and those provided by find ... | xargs prove ... are in conflict?

Have you tried running the find command by itself to check that it only selects those tests that you want?

Also, try running prove -v --norc -formatter=TAP::Formatter::JUnit TESTFILE for those tests individually until you run into the problem.

 perl -MApp::Prove -le 'print $App::Prove::VERSION'
3.28
[download]

by itself, find runs fine:

find test/ -name '*.t' | wc
    153     153    8012
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prove -v --norc -formatter=TAP::Formatter::JUnit TESTFILE
Archive is not a known format type! at /usr/coderyte/lib/perl5/5.8.8/A
+pp/Prove.pm line 538.
[download]

prove -r test/ , runs fine, but the output is not in JUnit format so it has to be the TAP Formatter, right ?

./perlmodver.sh TAP::Formatter::JUnit
TAP::Formatter::JUnit: 0.09
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which seems to be the latest

so it has to be the TAP Formatter

No. Looks like it its from https://metacpan.org/source/WONKO/TAP-Harness-Archive-0.14/lib/TAP/Harness/Archive.pm

        # if it's not a format we understand, or it's not a directory
        $class->_croak("Archive is not a known format type!")
          unless $format && $ARCHIVE_TYPES{$format};
my (%ARCHIVE_TYPES, @ARCHIVE_EXTENSIONS);
BEGIN {
    %ARCHIVE_TYPES = (
        'tar'    => 'tar',
        'tar.gz' => 'tar.gz',
        'tgz'    => 'tar.gz',
    );
    @ARCHIVE_EXTENSIONS = map { ".$_" } keys %ARCHIVE_TYPES;
}
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So its your xargs invocatio or its the extra -a/--archive option you're not showing

Crossposted to StackOverflow.