Confirmed.  The issue is with a caching mechanism in dir.m designed to speed it up.

if (! strcmp (last_dir, tmpdir))
  ## Caching mechanism to speed up function
  last_dir = tmpdir;
  last_absdir = canonicalize_file_name (last_dir);
endif

The function canonicalize_file_name is returning the full absolute path.  Here is a clumsy fix

diff -r 7da6136d3ecd scripts/miscellaneous/dir.m
--- a/scripts/miscellaneous/dir.m        Tue Jan 08 21:35:53 2019 -0800
+++ b/scripts/miscellaneous/dir.m        Fri Jan 11 14:32:17 2019 -0800
@@ -141,6 +141,9 @@ function retval = dir (directory)
           ## Caching mechanism to speed up function
           last_dir = tmpdir;
           last_absdir = canonicalize_file_name (last_dir);
+          if (! isdir (last_absdir))
+            last_absdir = fileparts (last_absdir);
+          endif
         endif
         info(i).folder = last_absdir;
         lt = localtime (st.mtime);

Really, the entire caching mechanism needs to be reviewed.  I think the regular expression used may be returning the wrong thing.