pnpm@7.18.0 fails to install dependencies with absolute file:/path/to/local/version overrides - worked in 7.17.1

[dominikg]

pnpm version: 7.18.0

Code to reproduce the issue:

create an override to a local checkout with absolute file path:

{
  "devDependencies": {
    "a": "file:/absolute/path/to/a"
  },
  "pnpm": {
    "overrides": {
      "a": "file:/absolute/path/to/a"
    }
  }
}

https://github.com/dominikg/pnpm-718-override-repro

Expected behavior:

installs local override

Actual behavior:

errors with the absolute path appended to cwd

reproductions/pnpm-718-issue/b ❯ pnpm i
 ERR_PNPM_LINKED_PKG_DIR_NOT_FOUND  Could not install from "/home/dominikg/develop/reproductions/pnpm-718-issue/b/home/dominikg/develop/reproductions/pnpm-718-issue/a" as it does not exist.

Additional information:

• node -v prints: 18.11.0
• Windows, macOS, or Linux?: linux

this pattern used to work great in vite-ecosystem-ci to provide a local built version of vite to downstream project cis.
relative file:../../ still work in pnpm 7.18 but are not sufficient as we have to be able to apply the override on different nesting levels of monorepo packages.