[BUG] /init creates CLAUDE.md at git root instead of launch directory when launched from subdirectory

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 Claude Code is launched from a subdirectory of a git repository and /init is run, the generated CLAUDE.md is created at the git root instead of the launch directory. This happens silently with no explanation to the user.

Additionally, before proceeding, /init does not clarify:

• Where the CLAUDE.md will be written
• What scope of the codebase it will read to generate the file

This leads to unexpected behavior — the user intends to generate documentation scoped to a subdirectory, but gets a repo-wide CLAUDE.md at the git root instead, without being told.

What Should Happen?

/init should generate CLAUDE.md in the directory Claude Code was launched from. If launched from a subdirectory, the file should be created there, scoped to that subdirectory's contents only.

If writing to the git root is intentional, /init must explicitly tell the user before proceeding — where the file will be written and what code it will read — so the user can make an informed decision.

Error Messages/Logs

Steps to Reproduce

1. Have a git repository with subdirectories
2. cd into a subdirectory (not the git root)
3. Run claude to start a session
4. Run /init
5. Observe that CLAUDE.md is created at the git root, not the launch directory, with no prior notice

Claude Model

None

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.71

Platform

Anthropic API

Operating System

Ubuntu/Debian Linux

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_