Public bug reported:

With Ubuntu 14.04 I could Ctrl-Shift-N in my gnome-terminal and another
terminal window came up with the same working directory. When I upgraded
to 16.04.1, the new terminal window now always uses $HOME as working
directory. I want the 14.04 behavior.

This has nothing to do with sourcing /etc/profile.d/vte.sh. Fish does
this correctly as I can observe directory changes in the title bar. If I
uncheck the custom command box in my gnome-terminal profile, the new
terminal window correctly uses the current directory. However, it uses
my system default shell: bash.

For some reason gnome-terminal does not set the working directory if I
use a custom command.

ProblemType: Bug
DistroRelease: Ubuntu 16.04
Package: gnome-terminal 3.18.3-1ubuntu1
ProcVersionSignature: Ubuntu 4.4.0-31.50-generic 4.4.13
Uname: Linux 4.4.0-31-generic x86_64
NonfreeKernelModules: openafs nvidia
ApportVersion: 2.20.1-0ubuntu2.1
Architecture: amd64
CurrentDesktop: Unity
Date: Wed Aug  3 12:32:22 2016
InstallationDate: Installed on 2013-02-13 (1266 days ago)
InstallationMedia: Ubuntu 12.10 "Quantal Quetzal" - Release amd64 (20121017.5)
JournalErrors:
 Error: command ['journalctl', '-b', '--priority=warning', '--lines=1000'] 
failed with exit code 1: Hint: You are currently not seeing messages from other 
users and the system.
       Users in the 'systemd-journal' group can see all messages. Pass -q to
       turn off this notice.
 No journal files were opened due to insufficient permissions.
SourcePackage: gnome-terminal
UpgradeStatus: Upgraded to xenial on 2016-08-01 (1 days ago)

** Affects: gnome-terminal (Ubuntu)
     Importance: Undecided
         Status: New


** Tags: amd64 apport-bug dist-upgrade regression-release xenial

** Tags added: dist-upgrade regression-release

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https://bugs.launchpad.net/bugs/1609342

Title:
  Gnome-terminal sets directory to HOME for ctrl-shift-n and custom
  shell command

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