Backport of Ensure that SourceBundleParser always receives a relative path for the Source Directory into v1.14 (#38124)

* backport of commit 8a63ac9

* backport of commit 1ed50c2

* backport of commit 4fe0dd4

* backport of commit 0f25b99

* backport of commit 9a9938d

* Backport changelog entry for SourceBundleParser#LoadConfigDir bug fix into 1.14

* Delete BUG FIXES-20260116-101253.yaml

---------

Co-authored-by: Abdurahman Abdelgany <abdu.abdelgany@hashicorp.com>

Author: github-actions[bot]

.changes/v1.14/BUG FIXES-20260116-101253.yaml

@@ -0,0 +1,5 @@
+kind: BUG FIXES
+body: 'Fixed an issue where terraform stacks validate was failing to resolve relative paths for modules'
+time: 2026-01-16T10:12:53.854705-05:00
+custom:
+    Issue: "38025"

internal/configs/source_bundle_parser.go

@@ -68,28 +68,35 @@ func (p *SourceBundleParser) LoadConfigDir(source sourceaddrs.FinalSource) (*Mod
 		return nil, diags
 	}
 
-	// The result of sources.LocalPathForSource is an absolute path, but we
+	// The result of sources.LocalPathForSource can be an absolute path, but we
 	// don't actually want to pass an absolute path for a module's SourceDir;
 	// doing so will cause the value of `path.module` in Terraform configs to
 	// differ across plans and applies, since tfc-agent performs plans and
 	// applies in temporary directories. Instead, we try to resolve a relative
 	// path from Terraform's working directory, which should always be a
 	// reasonable SourceDir value.
-	workDir, err := os.Getwd()
-	if err != nil {
-		diags = diags.Append(&hcl.Diagnostic{
-			Severity: hcl.DiagError,
-			Summary:  "Cannot resolve working directory",
-			Detail:   fmt.Sprintf("Failed to resolve current working directory: %s. This is a bug in Terraform - please report it.", err),
-		})
-	}
-	relativeSourceDir, err := filepath.Rel(workDir, sourceDir)
-	if err != nil {
-		diags = diags.Append(&hcl.Diagnostic{
-			Severity: hcl.DiagError,
-			Summary:  "Cannot resolve relative path",
-			Detail:   fmt.Sprintf("Failed to resolve relative path to module directory: %s. This is a bug in Terraform - please report it.", err),
-		})
+	var relativeSourceDir string
+	if filepath.IsAbs(sourceDir) {
+		workDir, err := os.Getwd()
+		if err != nil {
+			diags = diags.Append(&hcl.Diagnostic{
+				Severity: hcl.DiagError,
+				Summary:  "Cannot resolve working directory",
+				Detail:   fmt.Sprintf("Failed to resolve current working directory: %s. This is a bug in Terraform - please report it.", err),
+			})
+		}
+
+		relativeSourceDir, err = filepath.Rel(workDir, sourceDir)
+		if err != nil {
+			diags = diags.Append(&hcl.Diagnostic{
+				Severity: hcl.DiagError,
+				Summary:  "Cannot resolve relative path",
+				Detail:   fmt.Sprintf("Failed to resolve relative path to module directory: %s. This is a bug in Terraform - please report it.", err),
+			})
+		}
+	} else {
+		// sourceDir is already relative, use it as-is
+		relativeSourceDir = sourceDir
 	}
 	mod.SourceDir = relativeSourceDir
 

internal/configs/source_bundle_parser_test.go

@@ -0,0 +1,46 @@
+// Copyright (c) HashiCorp, Inc.
+// SPDX-License-Identifier: BUSL-1.1
+
+package configs
+
+import (
+	"path/filepath"
+	"testing"
+
+	"github.com/hashicorp/go-slug/sourceaddrs"
+	"github.com/hashicorp/go-slug/sourcebundle"
+)
+
+// TestSourceBundleParser_LoadConfigDir_WithRelativePath tests that when
+// LocalPathForSource returns a relative path, LoadConfigDir correctly uses
+// it as-is without attempting to convert it.
+func TestSourceBundleParser_LoadConfigDir_WithRelativePath(t *testing.T) {
+	// Use the basics-bundle from stacks testdata which has a component with has a relative source.
+	bundlePath := "../stacks/stackconfig/testdata/basics-bundle"
+	bundle, err := sourcebundle.OpenDir(bundlePath)
+	if err != nil {
+		t.Fatalf("failed to open source bundle: %s", err)
+	}
+
+	source := sourceaddrs.MustParseSource("../stacks/stackconfig/testdata/basics-bundle").(sourceaddrs.FinalSource)
+
+	// Create a SourceBundleParser and load the config directory.
+	parser := NewSourceBundleParser(bundle)
+	mod, diags := parser.LoadConfigDir(source)
+
+	if diags.HasErrors() {
+		t.Fatalf("unexpected errors: %s", diags.Error())
+	}
+
+	if mod == nil {
+		t.Fatal("expected non-nil module")
+	}
+
+	// Verify that the SourceDir is set and that it's a relative path.
+	if mod.SourceDir == "" {
+		t.Error("expected SourceDir to be set, but it was empty")
+	}
+	if filepath.IsAbs(mod.SourceDir) {
+		t.Errorf("expected SourceDir to be relative, but got absolute path: %s", mod.SourceDir)
+	}
+}