fix: support relative paths in dune install --prefix

bin/install_uninstall.ml

@@ -34,7 +34,9 @@ let interpret_destdir ~destdir path =
 let get_dirs context ~prefix_from_command_line ~from_command_line =
   let open Fiber.O in
   let module Roots = Install.Roots in
-  let prefix_from_command_line = Option.map ~f:Path.of_string prefix_from_command_line in
+  let prefix_from_command_line =
+    Option.map ~f:Path.of_string_allow_outside_workspace prefix_from_command_line
+  in
   let+ roots =
     match prefix_from_command_line with
     | None -> Memo.run (Context.roots context)

doc/changes/fixed/12993.md

@@ -0,0 +1,2 @@
+- Fix `dune install --prefix` failing with relative paths outside the workspace
+  like `../foo` (#12993, fixes #12241, @benodiwal)

otherlibs/stdune/src/path.ml

@@ -945,6 +945,15 @@ let of_filename_relative_to_initial_cwd fn =
   external_ (External.of_filename_relative_to_initial_cwd fn)
 ;;
 
+let of_string_allow_outside_workspace s =
+  if Filename.is_relative s
+  then (
+    match Local.L.relative_result Local.root (explode_path s) with
+    | Ok _ -> of_string s
+    | Error `Outside_the_workspace -> of_filename_relative_to_initial_cwd s)
+  else of_string s
+;;
+
 let to_absolute_filename t = Outside_build_dir.to_absolute_filename (local_or_external t)
 
 let external_of_local x ~root =

otherlibs/stdune/src/path.mli

@@ -249,6 +249,11 @@ val relative_to_source_in_build_or_external
     to the initial directory dune was launched in. *)
 val of_filename_relative_to_initial_cwd : string -> t
 
+(** Like [of_string], but if the path is relative and would escape the workspace
+    (e.g., [../foo]), it is treated as relative to the initial directory dune
+    was launched in instead of raising an error. *)
+val of_string_allow_outside_workspace : string -> t
+
 (** Convert a path to an absolute filename. Must be called after the workspace
     root has been set. [root] is the root directory of local paths *)
 val to_absolute_filename : t -> string

test/blackbox-tests/test-cases/install-relative-prefix.t

@@ -0,0 +1,24 @@
+Test that dune install accepts relative paths for --prefix that are outside the workspace.
+This is a regression test for issue #12241.
+
+  $ cat > dune-project <<EOF
+  > (lang dune 3.6)
+  > (package (name foo))
+  > EOF
+
+  $ cat > dune <<EOF
+  > (library
+  >  (name foo)
+  >  (public_name foo))
+  > EOF
+
+  $ cat > foo.ml <<EOF
+  > let x = 1
+  > EOF
+
+  $ dune build @install
+
+Test that relative path outside workspace works (previously failed with "path outside the workspace"):
+
+  $ dune install --prefix ../install-target --dry-run --display short 2>&1 | grep "Creating directory" | head -1
+  Creating directory $TESTCASE_ROOT/../install-target/lib/foo