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Environment variables act as a shortcut so that different computers can be configured in different ways, but a particular path will still point to the right place.
For example if you open up explorer and go to %TEMP%\ - you will open up whichever folder is set up as Temp on this machine. This is super useful so that you can use a particular logical folder without knowing the actual placement on every machine (for example the Windows Directory)
This works partially in the Directory / input - when you put in the environment variable, it is able to search possible subdirectories (screenshot 1) but it does not work once you run the workflow (screenshot 2).
It seems as if the designer hits the Windows API directly, but it does not work within the engine.
Please could you alter the engine to be able to make full use of the environment variables on the machine in question in the directory path or input tool path?