This is the path name of the current directory. Setting it causes the current directory to change. (We are talking about the current database directory inside the savefile. It is not a real directory on the filesystem.) It is perfectly legal to change to a non-existent directory. This new directory will not be saved to disk unless its buffer (or one of its children) is modified, however.
var/savefile/F = new() // temporary file
F.cd = "/MyDir/Icon"
F.cd = ".." // change to /MyDir
F.cd = "Icon" // change to /MyDir/Icon