Fix working_dir in workspace context recall for local runtime

- Fix CLI main.py to use runtime.workspace_root instead of os.getcwd()
- Fix agent_session.py to use runtime.workspace_root when available
- Add comprehensive unit tests to reproduce bug and verify fix
- Ensure working_dir reflects actual workspace path when using SANDBOX_VOLUMES

Fixes issue where workspace context recall showed /workspace instead of
the actual working directory when using SANDBOX_VOLUMES={other_folder}:/workspace:rw

Co-authored-by: openhands <openhands@all-hands.dev>

openhands/cli/main.py

@@ -329,7 +329,7 @@ async def run_session(
         selected_repository=config.sandbox.selected_repo,
         repo_directory=repo_directory,
         conversation_instructions=conversation_instructions,
-        working_dir=os.getcwd(),
+        working_dir=str(runtime.workspace_root),
     )
 
     # Add MCP tools to the agent

openhands/server/session/agent_session.py

@@ -153,13 +153,18 @@ class AgentSession:
             if custom_secrets:
                 custom_secrets_handler.set_event_stream_secrets(self.event_stream)
 
+            # Determine working directory - use runtime's workspace_root if available, otherwise fallback to config
+            working_dir = config.workspace_mount_path_in_sandbox
+            if self.runtime is not None:
+                working_dir = str(self.runtime.workspace_root)
+
             self.memory = await self._create_memory(
                 selected_repository=selected_repository,
                 repo_directory=repo_directory,
                 selected_branch=selected_branch,
                 conversation_instructions=conversation_instructions,
                 custom_secrets_descriptions=custom_secrets_handler.get_custom_secrets_descriptions(),
-                working_dir=config.workspace_mount_path_in_sandbox,
+                working_dir=working_dir,
             )
 
             # NOTE: this needs to happen before controller is created

tests/unit/memory/test_working_dir_fix.py

@@ -0,0 +1,97 @@
+"""
+Test for working_dir bug fix in workspace context recall.
+
+This test verifies that the working_dir in workspace context recall
+correctly reflects the runtime's actual workspace root instead of
+the hardcoded config value.
+"""
+
+import tempfile
+from pathlib import Path
+from unittest.mock import MagicMock
+
+import pytest
+
+from openhands.core.config import OpenHandsConfig
+from openhands.events.action.agent import RecallAction
+from openhands.events.observation.agent import RecallType
+from openhands.events.stream import EventStream
+from openhands.memory.memory import Memory
+from openhands.runtime.base import Runtime
+from openhands.storage.memory import InMemoryFileStore
+
+
+@pytest.fixture
+def file_store():
+    """Create a temporary file store for testing."""
+    return InMemoryFileStore({})
+
+
+@pytest.fixture
+def mock_runtime():
+    """Create a mock runtime for testing."""
+    runtime = MagicMock(spec=Runtime)
+    runtime.web_hosts = {}
+    runtime.additional_agent_instructions = ''
+    runtime.config = OpenHandsConfig()
+    return runtime
+
+
+def test_working_dir_uses_runtime_workspace_root(file_store, mock_runtime):
+    """Test that working_dir correctly uses runtime.workspace_root."""
+
+    with tempfile.TemporaryDirectory() as temp_dir:
+        # Set up mock runtime with actual working directory
+        actual_working_dir = temp_dir
+        mock_runtime.workspace_root = Path(actual_working_dir)
+
+        # Create event stream and memory
+        event_stream = EventStream('test_sid', file_store)
+        memory = Memory(event_stream, 'test_sid')
+
+        # Set runtime info using the runtime workspace_root (the fix)
+        memory.set_runtime_info(mock_runtime, {}, str(mock_runtime.workspace_root))
+
+        # Trigger workspace context recall
+        recall_action = RecallAction(
+            recall_type=RecallType.WORKSPACE_CONTEXT, query='test query'
+        )
+
+        # Get the workspace context observation
+        workspace_obs = memory._on_workspace_context_recall(recall_action)
+
+        # Verify that working_dir matches the runtime's workspace_root
+        assert workspace_obs.working_dir == str(actual_working_dir)
+        assert workspace_obs.working_dir == str(mock_runtime.workspace_root)
+
+
+def test_working_dir_bug_reproduction(file_store, mock_runtime):
+    """Test that demonstrates the original bug with hardcoded config value."""
+
+    with tempfile.TemporaryDirectory() as temp_dir:
+        # Set up mock runtime with actual working directory
+        actual_working_dir = temp_dir
+        mock_runtime.workspace_root = Path(actual_working_dir)
+
+        # Create event stream and memory
+        event_stream = EventStream('test_sid', file_store)
+        memory = Memory(event_stream, 'test_sid')
+
+        # Set runtime info using the hardcoded config value (the bug)
+        config = mock_runtime.config
+        memory.set_runtime_info(
+            mock_runtime, {}, config.workspace_mount_path_in_sandbox
+        )
+
+        # Trigger workspace context recall
+        recall_action = RecallAction(
+            recall_type=RecallType.WORKSPACE_CONTEXT, query='test query'
+        )
+
+        # Get the workspace context observation
+        workspace_obs = memory._on_workspace_context_recall(recall_action)
+
+        # Verify that working_dir incorrectly uses the config value instead of actual directory
+        assert workspace_obs.working_dir == config.workspace_mount_path_in_sandbox
+        assert workspace_obs.working_dir != str(actual_working_dir)
+        assert workspace_obs.working_dir != str(mock_runtime.workspace_root)