H,
Thanks for the repro. It looks like your toolchain fine sets the CXX executable in a way that confuses CMake. Please try moving the compiler arguments into a separate CMAKE_CXX_FLAGS statement:
set(ENV{CXX} "arm-vgdbtest-linux-gnueabi-g++" CACHE STRING "" FORCE)
set(CMAKE_CXX_FLAGS "-march=armv7ve -marm -mfpu=neon-vfpv4 -mfloat-abi=hard -mcpu=cortex-a7 --sysroot=$ENV{SDKTARGETSYSROOT}" CACHE STRING "" FORCE)