[BUG] Claude Code creates literal ~/ directory in working directory instead of expanding to home path

Preflight Checklist

• [x] I have searched existing issues and this hasn't been reported yet
• [x] This is a single bug report (please file separate reports for different bugs)
• [x] I am using the latest version of Claude Code

What's Wrong?

Claude Code's internal file operations create a literal ~/ directory in the current working directory instead of properly expanding ~ to the user's home directory.
It should not write "~/.claude" to the directory claude is operating out of. but expand the ~ to the home directory
Claude Code creates a literal directory named ~ in the working directory:
my-project/
├── ~/ # Should NOT exist
│ └── .claude-hs/
│ └── projects/
│ └── ...
├── src/
└── ...
The correct location should be:
/Users/username/.claude-hs/projects/...

Path expansion is not happening in Claude Code's internal file operations. When code attempts to write to ~/.claude-hs/..., it's being interpreted literally as ./~/.claude-hs/... relative to the current working directory.

What Should Happen?

Claude Code should expand ~ to the user's home directory (e.g., /Users/username/) when writing internal files.

Error Messages/Logs

Steps to Reproduce

I have not been able to reproduce this consistently, and figure out what command actually makes the write. But it happens fairly frequently.
Open Claude Code in any project directory
Let Claude Code run normally (no specific commands needed)
Check the working directory for a ~/ folder

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.3 (Claude Code)

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Terminal.app (macOS)

Additional Information

_No response_