The problem is that in the tar some folders are missing the execution flag. I've extracted the tar, added the missing permissions and rebuild the tar like this:
tar -zxvf search-activity_229.tgz
find search_activity/ -type d -exe chmod +x {} \;
tar -zcvf search-activity_229.tgz search_activity/
splunk install app search-activity_229.tgz -update 1 -auth <username>:<password>
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