I would just walk down the file system looking for the directory/file that we need.

From Keith Dahlby on nu-net:

I'm pretty sure Git just uses brute force, like we do in PowerShell for posh-git:

function Get-LocalOrParentPath($path) {
    $checkIn = Get-Item .

    while ($checkIn -ne $NULL) {
        $pathToTest = [System.IO.Path]::Combine($checkIn.fullname, $path)
        if (Test-Path $pathToTest) {

            return $pathToTest
        } else {
            $checkIn = $checkIn.parent

        }
    }
    return $null
}

Does "nu lib ." work?

I suppose it would, although now it'd be nu config lib.location ..
It wouldn't quite cover the behavior, but it might be close enough for some needs.