I must have some environment variable set, which affects this behavior, but I don't know which one that would be.

What happens is as follows:

No matter in what directory I execute this command:

python3 -m venv .venv

or

python3 -m venv $(pwd)/.venv

no matter if the path is relative or absolute, the value of "home" in generated pyvenv.cfg will point to some other virtual environment I created earlier.

I would expect that at the minimum, if you aren't going to use the argument given on command line, then, at the minimum, alert the user about it.  Why even bother given the argument in this case?

PS. I discovered this, perhaps, due to using Emacs + pyvenv-* commands which probably set some environment variables.