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

In 11.4 I run NPM install, and one of my packages is a local file one. It will install it, but the symbolic link goes to the wrong location.

Line in package.json:

"microservice-error": "file:../microservice-common/microservice-error",

Symbolic link created inside node_modules:
microservice-error -> ../microservice-error

Which does not lead to the repo.

Expected Behavior

Line in package.json:

"microservice-error": "file:../microservice-common/microservice-error",

Symbolic link should be which points to correct location:
microservice-error -> ../../microservice-common/microservice-error

This code works in 11.3

Steps To Reproduce

Create a package.json file that pulls a local file package.

Use multiple folder-level changes, run install, and see a symbolic link pointing to nothing.

Environment

• npm: 11.4.0
• Node.js: 22
• OS Name: Alpine
• Docker image node:22-alpine