tmux new pane has home directory as default instead of previous directory

Try specifying v for vertical or h for horizontal

My .tmux.conf file has:

bind \ split-window -h -c '#{pane_current_path}'  # Split panes horizontal
bind - split-window -v -c '#{pane_current_path}'  # Split panes vertically

(I use \ and - as one-finger pane splitters.)

New panes open for me using my current directory, wherever I am.
It's certainly a key feature for me!

One other critical thing with tmux (this was the issue in this case) is that you have to apply changes with:

tmux source-file ~/.tmux.conf

Note that closing terminals, even logging off and restarting, will NOT apply tmux changes – you have to actually use that command (or use Ctrl+B :source-file ~/.tmux.conf).

You can see my full .tmux.conf file at https://github.com/durrantm/setups.

bind '%' split-window -h -c '#{pane_current_path}'  # Split panes horizontal
bind '"' split-window -v -c '#{pane_current_path}'  # Split panes vertically
bind c new-window -c '#{pane_current_path}' # Create new window

Add last line to your ~/.tmux.conf to maintain $PWD in new window as well.

That's because,

bind " split-window -c "#{pane_current_path}"

should be

bind '"' split-window -c "#{pane_current_path}"