For not-so great a bash users, it means shutting down the server and relaunching in a new directory.
From a ux perspective, i could see it being scary that you could wind up outside the /Users/me folder, but that you be solved with a reset button that jumps you back to your entry point directory.
The list of files/directories in JupyterLab is an abstraction over the backend storage system. The default is to use your local filesystem for storing files but there are many alternatives, you can read more about the design here: https://jupyter-server.readthedocs.io/en/latest/developers/contents.html
