[BUG] @ links in subdirectory CLAUDE.md files not resolved when opened from parent directory

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?

When a CLAUDE.md file in a subdirectory uses an @ link to reference an external file (e.g., @~/.claude/plugins/...), the link is not resolved if Claude Code is launched from a parent directory. The subdirectory CLAUDE.md file itself is found and loaded, but the @ link inside it is ignored.

What Should Happen?

When prompting CC and mentioning some file from a sub-folder with a CLAUDE.md file, external references in that file should be resolved.

Error Messages/Logs

Steps to Reproduce

1. Create a monorepo structure:

/project/
CLAUDE.md
subdir/
CLAUDE.md → contains: @~/.claude/plugins/my-plugin/instructions.md

1. Create the external file at ~/.claude/plugins/my-plugin/instructions.md with some distinctive content

1. Test the following scenarios:

| Launch directory | Subdirectory CLAUDE.md | @ link resolved? |
|------------------|------------------------|------------------|
| /project/subdir/ | local content (no @ link) | ✅ works |
| /project/ | local content (no @ link) | ✅ works |
| /project/ | uses @ link | ❌ not resolved |
| /project/subdir/ | uses @ link | ✅ works |

1. Ask Claude some question and mention inside

Claude Model

Opus

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.7

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Terminal.app (macOS)

Additional Information

_No response_