I thought I ran all tests after fixing issue2668 but apparently I 
did not. Many of the patch-index tests fail now with darcs issuing 
an an error message like

darcs: /tmp/./_darcs/patch_index-f79eaa0fcf98d8b8: createDirectory: 
does not exist (No such file or directory)

This is because withPermDir (like withDelayedDir and withTempDir) 
interprets relative file paths as relative to /tmp. (This is stupid 
IMO, but that's another issue.) It turns out that in the patch index 
code we pass a path that starts with (repoLocation repo), which, for 
newly created repos, seems to be ".". Which is bad: the repoLocation 
of a repo should be an absolute path or URL, never a relative path. 
The fix is to convert "." into an absolute path in 
Darcs.Repository.Create.

resolved by

patch e71832422d19674725e1034a29eca4c8fbc644b1
Author: Ben Franksen <ben.franksen@online.de>
Date:   Fri Dec 18 10:03:31 CET 2020
  * resolve issue2670: convert "." to absolute path when creating a 
repo
  
  Note that this is what we also do in Darcs.Repository.Identify.

See patch2124