re: using a sh implementation that doesn't set PWD
from posix:

PWD
  This variable shall represent an absolute pathname of the
  current working directory. It shall not contain any
  components that are dot or dot-dot. The value is set by the
  cd utility, and by the sh utility during initialization.

if the shell runs any command then PWD will be in that command's environment
unless it is explicitly unset before the command is executed

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