Charmcraft confuses the current directory with the project directory when both has a charmcraft.yaml

[gycsaba96]

Check existing issues

• I've verified that this bug isn't described by any existing issues.

Bug description

When both the current working directory and the project directory provided by -p contain a charmcraft.yaml, charmcraft gets confused (somehow mixes the two and fails).

Steps to reproduce

1. Clone and enter https://github.com/canonical/istio-beacon-k8s-operator.git
2. Run charmcraft pack -p ./tests/integration/testers/service-mesh-tester
3. Observe an error:

ubuntu@microk8s-vm:~/istio-beacon-k8s-operator$ charmcraft pack -p ./tests/integration/testers/service-mesh-tester
Platform 'ubuntu@22.04:amd64' not found in the project definition.
Detailed information: Valid platforms are: 'ubuntu-20.04-amd64'.
Failed to run charmcraft in instance
Full execution log: '/home/ubuntu/.local/state/charmcraft/log/charmcraft-20260526-184109.244315.log'

4. Run charmcraft pack and observe a successful build.
5. Remove the charmcraft file from the current dir: rm charmcraft.yaml
6. Run charmcraft pack -p ./tests/integration/testers/service-mesh-tester and see it succeed.

Environment

Charmcraft version: 4.2.1
OS: Ubuntu 24.04 (inside my development VM)
(It worked before updating from 4.0.1 to 4.2.1)

It also fails CI pipelines with a similar setup.

charmcraft.yaml

Log output