Can't stage a hunk from file up a dir from PWD

[mangelozzi]

Description

I have a project structure that looks like this (these dirs all exist in the git project):

config/
info/
install/
scripts/
src/
   |---dir1/
   |---dir2/

I generally have the PWD of VIM set to src/ for python linting and thats the dir the project starts up in.
When I review a file say in the config/ dir, and try to stage hunk it with Neogit, it shows an error message (image below). One can stage the whole file succesfully though, just not the hunk

Neovim version

NVIM v0.8.2
Build type: Release
LuaJIT 2.1.0-beta3
Compiled by runner@fv-az190-151

Operating system and version

Ubuntu 22.04

Steps to reproduce

1. Open a git project
2. make a change in a file higher up in the project structure
3. CD into a lower dir
4. Try stage the file in the higher up dir.

Expected behavior

The hunk to be staged

Actual behavior

The following error message:

The file is actually ../README.md, and not src/../README.md. Which it gets right if one stages the whole file.

Minimal config

vim.cmd([[set runtimepath=$VIMRUNTIME]])
vim.cmd([[set packpath=/tmp/nvim/site]])
local package_root = "/tmp/nvim/site/pack"
local install_path = package_root .. "/packer/start/packer.nvim"
local function load_plugins()
  require("packer").startup({
    {
      "wbthomason/packer.nvim",
      {
        "TimUntersberger/neogit",
        requires = {
          { "nvim-lua/plenary.nvim" },
          { "sindrets/diffview.nvim" },
        },
        config = function()
          print("loaded neogit")
          require("neogit").setup()
        end,
      },
    },
    config = {
      package_root = package_root,
      compile_path = install_path .. "/plugin/packer_compiled.lua",
      display = { non_interactive = true },
    },
  })
end
if vim.fn.isdirectory(install_path) == 0 then
  print("Installing neogit and dependencies.")
  vim.fn.system({ "git", "clone", "--depth=1", "https://github.com/wbthomason/packer.nvim", install_path })
end
load_plugins()
require("packer").sync()

[dusty-phillips]

This is happening for me on MacOS in a monorepo setup as well. My workaround is to stage individual hunks directly from the buffer using the git-signs plugin.