git ls-files -X option is relative to repo root

I encountered some unexpected behavior with Git today and was hoping to either a) clear up my misconception or b) make a bug report.

My question deals with the --exclude-from option to git-ls-files. It appears that paths passed to this option are relative to the root of the repository, not your current working directory. I would have expected the opposite, that the paths are relative to the working directory. I would expect to put a colon at the beginning of the path to make it relative to the repository root. Here's an example:

$ tree -a -I .git
.
├── .gitignore
└── example_dir
    ├── .gitignore
    └── example_file

# (all of these files are checked in, including example_file which is also in .gitignore)

$ cat .gitignore # empty gitignore

$ cat example_dir/.gitignore example_file

$ (cd example_dir && git ls-files --ignore --exclude-from=.gitignore) # No output because this references the git ignore at the project root, not example_dir. I expected this to output "example_file".

$ (cd example_dir && git ls-files --ignore --exclude-from=example_dir/.gitignore) example_file # works for the reason above, but I expected this to break because example_dir/example_dir/.gitignore is not a file

So, what do you think? Am I missing a git/*nix convention explaining options would be specified relative to the repository root? Or is this a git bug?

Thanks for your time, Dan Finnie