[BUG] Invalid folder names and name collisions under `projects`

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?

Under the current naming scheme, pathnames are converted to project folder names using hyphens. This creates three separate problems:

1. It's not POSIX-compatible (POSIX does not permit leading hyphens in file names, and such files may break when moved across systems)
2. A leading hyphen breaks lots of shell scripts (leading hyphens are often misinterpreted as command line flags)
3. This mapping between paths and folder names is not one-to-one, as several directories can be mapped to the same folder under projects. (e.g. xyz-abc and xyz/abc will map to the same place.)

What Should Happen?

Project folders should be nested and have the same structure as the folders they represent.

Error Messages/Logs

Steps to Reproduce

Start a conversation in a nested folder.

Claude Model

None

Is this a regression?

No, this never worked

Last Working Version

_No response_

Claude Code Version

2.1.140 (Claude Code)

Platform

Anthropic API

Operating System

Ubuntu/Debian Linux

Terminal/Shell

Other

Additional Information

_No response_