Backups folder is created outside of the server directory when using a dedicated server

On startup, the server attempts to create a backups folder as ../backups (i.e. a folder one folder up from its work location/"universe"), apparently for use when converting non-anvil worlds. This is problematic, because e.g. on shared hosts this location may not have write access, so the server will fail to start (but even ignoring that issue, it is confusing to put the backups folder outside of the server itself ("why is there suddenly an empty backups folder here?")).

The failed startup can be reproduced when launching a server on windows within your user directory (C:\Users\<USERNAME>) from an account that doesn't have permission to write to C:\Users. Doing so causes the server to fail to start, with this error message (quoting Dusty A from MC-122621):

[17:28:32] [main/FATAL]: Failed to start the minecraft server
java.lang.RuntimeException: java.nio.file.AccessDeniedException: C:\Users\Dusty\.\..\backups
        at bix.<init>(SourceFile:36) ~[minecraft_server.17w48a.jar:?]
        at biu.<init>(SourceFile:38) ~[minecraft_server.17w48a.jar:?]
        at net.minecraft.server.MinecraftServer.<init>(SourceFile:197) ~[minecraft_server.17w48a.jar:?]
        at px.<init>(SourceFile:71) ~[minecraft_server.17w48a.jar:?]
        at net.minecraft.server.MinecraftServer.main(SourceFile:748) [minecraft_server.17w48a.jar:?]
Caused by: java.nio.file.AccessDeniedException: C:\Users\Dusty\.\..\backups
        at sun.nio.fs.WindowsException.translateToIOException(Unknown Source) ~[?:1.8.0_151]
        at sun.nio.fs.WindowsException.rethrowAsIOException(Unknown Source) ~[?:1.8.0_151]
        at sun.nio.fs.WindowsException.rethrowAsIOException(Unknown Source) ~[?:1.8.0_151]
        at sun.nio.fs.WindowsFileSystemProvider.createDirectory(Unknown Source) ~[?:1.8.0_151]
        at java.nio.file.Files.createDirectory(Unknown Source) ~[?:1.8.0_151]
        at java.nio.file.Files.createAndCheckIsDirectory(Unknown Source) ~[?:1.8.0_151]
        at java.nio.file.Files.createDirectories(Unknown Source) ~[?:1.8.0_151]
        at bix.<init>(SourceFile:34) ~[minecraft_server.17w48a.jar:?]
        ... 4 more

Original description:

Tried with both the above versions of Java, cant start a fresh world or a world created with last weeks snap.

With Java 8 fails with this output:

[10:23:22] ain/FATAL]: Failed to start the minecraft server
java.lang.RuntimeException: java.nio.file.AccessDeniedException: /var/games/minecraft/servers/Flat_1_13_Dev/./../backups
at bis.<init>(SourceFile:36) ~inecraft_server.17w47a.jar:?]
at bip.<init>(SourceFile:38) ~inecraft_server.17w47a.jar:?]
at net.minecraft.server.MinecraftServer.<init>(SourceFile:194) ~inecraft_server.17w47a.jar:?]
at pw.<init>(SourceFile:71) ~inecraft_server.17w47a.jar:?]
at net.minecraft.server.MinecraftServer.main(SourceFile:744) inecraft_server.17w47a.jar:?]
Caused by: java.nio.file.AccessDeniedException: /var/games/minecraft/servers/Flat_1_13_Dev/./../backups
at sun.nio.fs.UnixException.translateToIOException(UnixException.java:84) ~[?:1.8.0_131]
at sun.nio.fs.UnixException.rethrowAsIOException(UnixException.java:102) ~[?:1.8.0_131]
at sun.nio.fs.UnixException.rethrowAsIOException(UnixException.java:107) ~[?:1.8.0_131]
at sun.nio.fs.UnixFileSystemProvider.createDirectory(UnixFileSystemProvider.java:384) ~[?:1.8.0_131]
at java.nio.file.Files.createDirectory(Files.java:674) ~[?:1.8.0_131]
at java.nio.file.Files.createAndCheckIsDirectory(Files.java:781) ~[?:1.8.0_131]
at java.nio.file.Files.createDirectories(Files.java:767) ~[?:1.8.0_131]
at bis.<init>(SourceFile:34) ~inecraft_server.17w47a.jar:?]
... 4 more

Java 9 this output:

[10:22:34] ain/FATAL]: Failed to start the minecraft server
java.lang.RuntimeException: java.nio.file.AccessDeniedException: /var/games/minecraft/servers/Flat_1_13_Dev/./../backups
at bis.<init>(SourceFile:36) ~inecraft_server.17w47a.jar:?]
at bip.<init>(SourceFile:38) ~inecraft_server.17w47a.jar:?]
at net.minecraft.server.MinecraftServer.<init>(SourceFile:194) ~inecraft_server.17w47a.jar:?]
at pw.<init>(SourceFile:71) ~inecraft_server.17w47a.jar:?]
at net.minecraft.server.MinecraftServer.main(SourceFile:744) inecraft_server.17w47a.jar:?]
Caused by: java.nio.file.AccessDeniedException: /var/games/minecraft/servers/Flat_1_13_Dev/./../backups
at sun.nio.fs.UnixException.translateToIOException(UnixException.java:90) ~[?:?]
at sun.nio.fs.UnixException.rethrowAsIOException(UnixException.java:111) ~[?:?]
at sun.nio.fs.UnixException.rethrowAsIOException(UnixException.java:116) ~[?:?]
at sun.nio.fs.UnixFileSystemProvider.createDirectory(UnixFileSystemProvider.java:385) ~[?:?]
at java.nio.file.Files.createDirectory(Files.java:682) ~[?:?]
at java.nio.file.Files.createAndCheckIsDirectory(Files.java:789) ~[?:?]
at java.nio.file.Files.createDirectories(Files.java:775) ~[?:?]
at bis.<init>(SourceFile:34) ~inecraft_server.17w47a.jar:?]
... 4 more

Box itself is only a couple of months old. Have done all the obvious, updates & patches all to latest. Deleted and re-downloaded jar file etc.

Working fine with last weeks snaps by no joy with this one.

Edit: Same behavior is 17w47b