diff --git a/lib/bundler/cli/install.rb b/lib/bundler/cli/install.rb
index 94d485682d..c31be40e55 100644
--- a/lib/bundler/cli/install.rb
+++ b/lib/bundler/cli/install.rb
@@ -160,9 +160,7 @@ module Bundler
       Bundler.settings.set_command_option_if_given :path, options[:path]
 
       if options["standalone"] && Bundler.settings[:path].nil? && !options["local"]
-        Bundler.settings.temporary(path_relative_to_cwd: false) do
-          Bundler.settings.set_command_option :path, "bundle"
-        end
+        Bundler.settings.set_command_option :path, "bundle"
       end
 
       bin_option = options["binstubs"]
diff --git a/lib/bundler/feature_flag.rb b/lib/bundler/feature_flag.rb
index efd128139a..35390edc6c 100644
--- a/lib/bundler/feature_flag.rb
+++ b/lib/bundler/feature_flag.rb
@@ -32,7 +32,6 @@ module Bundler
     settings_flag(:forget_cli_options) { bundler_4_mode? }
     settings_flag(:global_gem_cache) { bundler_4_mode? }
     settings_flag(:lockfile_checksums) { bundler_4_mode? }
-    settings_flag(:path_relative_to_cwd) { bundler_4_mode? }
     settings_flag(:plugins) { @bundler_version >= Gem::Version.new("1.14") }
     settings_flag(:setup_makes_kernel_gem_public) { !bundler_4_mode? }
     settings_flag(:update_requires_all_flag) { bundler_5_mode? }
diff --git a/lib/bundler/man/bundle-config.1 b/lib/bundler/man/bundle-config.1
index 4628a885f0..04c0bffcee 100644
--- a/lib/bundler/man/bundle-config.1
+++ b/lib/bundler/man/bundle-config.1
@@ -146,9 +146,6 @@ The location on disk where all gems in your bundle will be located regardless of
 \fBpath\.system\fR (\fBBUNDLE_PATH__SYSTEM\fR)
 Whether Bundler will install gems into the default system path (\fBGem\.dir\fR)\.
 .TP
-\fBpath_relative_to_cwd\fR (\fBBUNDLE_PATH_RELATIVE_TO_CWD\fR)
-Makes \fB\-\-path\fR relative to the CWD instead of the \fBGemfile\fR\.
-.TP
 \fBplugins\fR (\fBBUNDLE_PLUGINS\fR)
 Enable Bundler's experimental plugin system\.
 .TP
diff --git a/lib/bundler/man/bundle-config.1.ronn b/lib/bundler/man/bundle-config.1.ronn
index 10ede264b0..928a34297f 100644
--- a/lib/bundler/man/bundle-config.1.ronn
+++ b/lib/bundler/man/bundle-config.1.ronn
@@ -168,8 +168,6 @@ learn more about their operation in [bundle install(1)](bundle-install.1.html).
    before Bundler 4.
 * `path.system` (`BUNDLE_PATH__SYSTEM`):
    Whether Bundler will install gems into the default system path (`Gem.dir`).
-* `path_relative_to_cwd` (`BUNDLE_PATH_RELATIVE_TO_CWD`):
-   Makes `--path` relative to the CWD instead of the `Gemfile`.
 * `plugins` (`BUNDLE_PLUGINS`):
    Enable Bundler's experimental plugin system.
 * `prefer_patch` (BUNDLE_PREFER_PATCH):
diff --git a/lib/bundler/settings.rb b/lib/bundler/settings.rb
index f0c8448b8b..b24cd4795f 100644
--- a/lib/bundler/settings.rb
+++ b/lib/bundler/settings.rb
@@ -34,7 +34,6 @@ module Bundler
       lockfile_checksums
       no_install
       no_prune
-      path_relative_to_cwd
       path.system
       plugins
       prefer_patch
diff --git a/lib/bundler/settings/validator.rb b/lib/bundler/settings/validator.rb
index 0a57ea7f03..9aa1627fb2 100644
--- a/lib/bundler/settings/validator.rb
+++ b/lib/bundler/settings/validator.rb
@@ -74,29 +74,6 @@ module Bundler
           fail!(key, value, "`#{other_key}` is current set to #{other_setting.inspect}", "the `#{conflicting.join("`, `")}` groups conflict")
         end
       end
-
-      rule %w[path], "relative paths are expanded relative to the current working directory" do |key, value, settings|
-        next if value.nil?
-
-        path = Pathname.new(value)
-        next if !path.relative? || !Bundler.feature_flag.path_relative_to_cwd?
-
-        path = path.expand_path
-
-        root = begin
-                 Bundler.root
-               rescue GemfileNotFound
-                 Pathname.pwd.expand_path
-               end
-
-        path = begin
-                 path.relative_path_from(root)
-               rescue ArgumentError
-                 path
-               end
-
-        set(settings, key, path.to_s)
-      end
     end
   end
 end
diff --git a/spec/bundler/install/path_spec.rb b/spec/bundler/install/path_spec.rb
index 92bb158958..0ede8df8ff 100644
--- a/spec/bundler/install/path_spec.rb
+++ b/spec/bundler/install/path_spec.rb
@@ -59,29 +59,41 @@ RSpec.describe "bundle install" do
       expect(the_bundle).to include_gems "myrack 1.0.0"
     end
 
-    context "with path_relative_to_cwd set to true" do
-      before { bundle "config set path_relative_to_cwd true" }
+    it "installs the bundle relatively to repository root, when Bundler run from the same directory" do
+      bundle "config path vendor/bundle", dir: bundled_app.parent
+      bundle "install --gemfile='#{bundled_app}/Gemfile'", dir: bundled_app.parent
+      expect(out).to include("installed into `./bundled_app/vendor/bundle`")
+      expect(bundled_app("vendor/bundle")).to be_directory
+      expect(the_bundle).to include_gems "myrack 1.0.0"
+    end
 
-      it "installs the bundle relatively to current working directory" do
-        bundle "install --gemfile='#{bundled_app}/Gemfile' --path vendor/bundle", dir: bundled_app.parent
-        expect(out).to include("installed into `./vendor/bundle`")
-        expect(bundled_app("../vendor/bundle")).to be_directory
-        expect(the_bundle).to include_gems "myrack 1.0.0"
-      end
+    it "installs the bundle relatively to repository root, when Bundler run from a different directory" do
+      bundle "config path vendor/bundle", dir: bundled_app
+      bundle "install --gemfile='#{bundled_app}/Gemfile'", dir: bundled_app.parent
+      expect(out).to include("installed into `./bundled_app/vendor/bundle`")
+      expect(bundled_app("vendor/bundle")).to be_directory
+      expect(the_bundle).to include_gems "myrack 1.0.0"
+    end
 
-      it "installs the standalone bundle relative to the cwd" do
-        bundle :install, gemfile: bundled_app_gemfile, standalone: true, dir: bundled_app.parent
-        expect(out).to include("installed into `./bundled_app/bundle`")
-        expect(bundled_app("bundle")).to be_directory
-        expect(bundled_app("bundle/ruby")).to be_directory
+    it "installs the bundle relatively to Gemfile folder, when repository root can't be inferred from settings" do
+      bundle "install --gemfile='#{bundled_app}/Gemfile' --path vendor/bundle", dir: bundled_app.parent
+      expect(out).to include("installed into `./bundled_app/vendor/bundle`")
+      expect(bundled_app("vendor/bundle")).to be_directory
+      expect(the_bundle).to include_gems "myrack 1.0.0"
+    end
 
-        bundle "config unset path"
+    it "installs the standalone bundle relative to the cwd" do
+      bundle :install, gemfile: bundled_app_gemfile, standalone: true, dir: bundled_app.parent
+      expect(out).to include("installed into `./bundled_app/bundle`")
+      expect(bundled_app("bundle")).to be_directory
+      expect(bundled_app("bundle/ruby")).to be_directory
 
-        bundle :install, gemfile: bundled_app_gemfile, standalone: true, dir: bundled_app("subdir").tap(&:mkpath)
-        expect(out).to include("installed into `../bundle`")
-        expect(bundled_app("bundle")).to be_directory
-        expect(bundled_app("bundle/ruby")).to be_directory
-      end
+      bundle "config unset path"
+
+      bundle :install, gemfile: bundled_app_gemfile, standalone: true, dir: bundled_app("subdir").tap(&:mkpath)
+      expect(out).to include("installed into `../bundle`")
+      expect(bundled_app("bundle")).to be_directory
+      expect(bundled_app("bundle/ruby")).to be_directory
     end
   end