I've tested this with both the variables set and unset (if unset it's set by default always anyway) and both with GAIA_DISTRIBUTION_DIR and without, and with single variant operator apps and without... and it works correctly in all the cases with the variable instead of ../..

Might it be because of the comment you use before that Windows don't like absolute paths?

Do you know what Windows environment do we support (that is, which make/etc are we using on Windows)? I haven't been able to find information about that.