Had the same problem in Lubuntu 14.04.1. At least in my case behavior
depends on the terminal. Hence, it might be a bug related to the
specific terminal. Anyway, it worked with xterm, and lxterminal. It does
not work with lilyterm 0.9.9.4-0~1. I haven't tried others.

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https://bugs.launchpad.net/bugs/1205409

Title:
  open current folder in terminal sets working dir always to home

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