Flat file connection profile doesn't allow relative path to folder & other

1. New -> Connection profile -> Flat file data source
2. Set home folder to relative path
3. Finish; Import: Flat file source >> source model
4. Choose the created flat file connection profile
5. Clicking through the wizard, a model is created
6. Executing VDB containing the model and flat file source model causes error (flat file - "EmpData.csv - not found)

ad 5. clicking on "Edit..." gives error message "Invalid flat file data source path. Please correct the connection profile."

Next unclear behavior:
ad 2. checkbox "Validate home folder" is checked and "Test connection" button does nothing, and buttons "Next", "Finish" are disabled
(after setting both relative or absolute path)