I suspect it has to do with the system 7 desktop -- I haven't used
system 7 except for a very short time (unfortunately Macs aren't popular
at this institute) but I've heard a rumor that the desktop is not actually
in the HFS namespace -- access to it requires some magic that the finder
and the get file dialog know about (and which is undoubtedly documented
in some obscure Apple note) but which isn't automatically invoked by
the PBHSetVol() call that mac.chdir() makes.