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Today, cwd affects resolution of the entrypoint so when you ts-node --cwd foo bar.ts then you run foo/bar.ts
Seems nice enough from a user perspective, but from a maintenance and compatibility perspective it gets hairy. Cuz what should happen when user code forks a child process in a different working directory, expecting the entrypoint for that child process to be resolved relative to that working directory.
It's not clear we should even have a --cwd option. tsc and node do not. At the very least, it shouldn't be affecting the resolution of entrypoint scripts. That makes us incompatible with node and it's feature creep.