Can't repro this.
Yeah, $CWD doesn't trigger that error any more;
but another one still exists.
Put some build artifacts in that directory,
ie. files that are not UTF8. (.o, binaries, etc.)
When reading such files /usr/bin/break_filelist stops with an error,
unless the locale is binary-safe (LC_ALL=C).
Categorizing files.
utf8 "\xB8" does not map to Unicode at /usr/bin/break_filelist line
664, <CODE_FILE> line 1.
Malformed UTF-8 character (fatal) at /usr/bin/break_filelist line 665,
<CODE_FILE> line 1.