Thanks Karl, that looks great!
>
> I know that this would be a big/incompatible change (diff below, not
> committed anywhere yet). However, I'm guessing that no one but Eitan
> ever created significant personal tex4ht.env files, especially ones
> relying on %%~.
>
I think I've created few customized tex4ht.env version few years back,
mainly to fix image conversion issues. But it can be fixed much easier
using make4ht today. So I think it should be OK.
> For complete safety, I guess we could make up another construct, say
> %%+, which would expand to TEXMFDIST, change the .env's to use that, and
> leave %%~ as-is. That would be easy to do, but is it necessary? I wonder.
>
Probably not :)
Best,
Michal