Various arguments that take any path can run into issues when we pass something like --prefix ../bar. When we interpret paths, our library sees that the relative path is outside the workspace and rejects it. The current workaround is for the user to make the path absolute by passing $PWD/../bar instead.
One solution would be to make all such paths absolute, however this does change the intention of the user. A better option would be to have something in the path API that allows us to treat relative paths outside of the workspace.