[BUG] incorrect resolution of relative paths with install-strategy=linked #7549

Is there an existing issue for this?

• I have searched the existing issues

This issue exists in the latest npm version

• I am using the latest npm

Current Behavior

I have a package with a relative path dependency.

File /Users/dan/Source/project1/package.json

{
  "dependencies": {
    "project2": "file:./project2"
  }
}

And the file /Users/dan/Source/project1/project2/package.json exists.

This installs fine with every install strategy except linked where I receive the below error:

$ npm install --install-strategy linked
npm warn reify The "linked" install strategy is EXPERIMENTAL and may contain bugs.
npm warn tarball tarball data for project2@file:../project2 (null) seems to be corrupted. Trying again.
npm warn tarball tarball data for project2@file:../project2 (null) seems to be corrupted. Trying again.
npm error code ENOENT
npm error syscall open
npm error path /Users/dan/Source/project2/package.json
npm error errno -2
npm error enoent Could not read package.json: Error: ENOENT: no such file or directory, open '/Users/dan/Source/project2/package.json'
npm error enoent This is related to npm not being able to find a file.
npm error enoent
npm error A complete log of this run can be found in: /Users/dan/.npm/_logs/2024-05-22T02_17_21_083Z-debug-0.log

Note that:

1. The error mentions project2@file:../project2, which is not the depended path.
2. The path that it's looking for package.json is at /Users/dan/Source/project2/package.json, NOT /Users/dan/Source/project1/project2/package.json

Expected Behavior

The package should install correctly.

Steps To Reproduce

see above

Environment

• npm: 10.8.0
• Node.js: 22.2.0
• OS Name: macOS
• System Model Name:
• npm config:

; copy and paste output from `npm config ls` here