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When there is no persistent PowerShell interpreter PSHELL changes the current working directory to %SYSTEMROOT\System32. It does not do this if a persistent PowerShell interpreter is running,
Code:
v:\> pshell /c
v:\> pshell /s "echo foo"
foo
c:\windows\system32> v:
v:\> pshell /s "echo foo"
foo
v:\>