I'm referencing this code:
https://github.com/flatcar-linux/bootengine/blob/8043da392dea21dbcaac57256d7c0a78e270bc53/dracut/03flatcar-network/parse-ip-for-networkd.sh#L73

We have a pxe boot environment that doesn't use DHCP (it's crazier than you think). Everything is statically configured from the firmware we run on the NICs down. We use the ip= kernel command line option to propagate network config through the layers during boot.

However, in the flatcar pxe ramdisk there's no /etc/systemd/network directory. This means that parse-ip-for-networkd can't generate it's output files.

Might I suggest a mkdir -p $(basename $_net_file) be inserted as line 74?

We worked around the issue by putting the directory into the pxe ramdisk.