[BUG] autoMemoryDirectory setting does not update the memory path in system prompt

[boluoim]

Description

When autoMemoryDirectory is set in project settings, the system prompt still instructs the model to use the default path (~/.claude/projects/<encoded-path>/memory/). This causes the model to read/write memory at the wrong location, ignoring the custom setting entirely.

Steps to reproduce

1. Set "autoMemoryDirectory": ".claude/memory" in .claude/settings.json
2. Create memory files at .claude/memory/MEMORY.md
3. Start a new Claude Code session
4. The system prompt # auto memory section still contains:

   You have a persistent, file-based memory system at /Users/<user>/.claude/projects/-<encoded-path>/memory/
   

5. Model reads/writes to the default path, not the configured .claude/memory/

Expected behavior

The system prompt should reflect the configured autoMemoryDirectory path, e.g.:

You have a persistent, file-based memory system at <project-root>/.claude/memory/

Actual behavior

The system prompt always uses the default encoded path regardless of autoMemoryDirectory setting. The model follows the system prompt and operates on the wrong directory.

Workaround

Add an explicit override in project CLAUDE.md to force the model to use the correct path, since CLAUDE.md instructions take priority over the system prompt.

Environment

• Claude Code version: latest
• OS: macOS

[github-actions]

Found 2 possible duplicate issues:

1. [BUG] autoMemoryDirectory ignored #33535
2. autoMemoryDirectory should support relative paths like plansDirectory #34146

This issue will be automatically closed as a duplicate in 3 days.

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🤖 Generated with Claude Code

[CVirus]

Additionally, /memory -> Open auto-memory folder still opens /Users/<user>/.claude/projects/-<encoded-path>/memory/

[CVirus]

Additionally, /memory -> Open auto-memory folder still opens /Users/<user>/.claude/projects/-<encoded-path>/memory/

Using absolute paths solves this ^

#34146

[CVirus]

It seems that using absolute paths also solves the system prompt issue.

My settings.local.json:
"autoMemoryDirectory": "/Users/REDACTED/PROJECT_NAME/.claude/memory",

❯ What path does your system prompt say to use for memory files?

⏺ /Users/REDACTED/PROJECT_NAME/.claude/memory/

Important caveat: autoMemoryDirectory doesn't work in .claude/settings.json:

This setting is accepted from policy, local, and user settings. It is not accepted from project settings (.claude/settings.json) to prevent a shared project from redirecting auto memory writes to sensitive locations.

[github-actions]

This issue has been automatically locked since it was closed and has not had any activity for 7 days. If you're experiencing a similar issue, please file a new issue and reference this one if it's relevant.