Add a failing test

crates/uv/tests/init.rs

@@ -511,3 +511,80 @@ fn init_invalid_names() -> Result<()> {
 
     Ok(())
 }
+
+#[test]
+fn init_nested_workspace() -> Result<()> {
+    let context = TestContext::new("3.12");
+
+    let pyproject_toml = context.temp_dir.child("pyproject.toml");
+    pyproject_toml.write_str(indoc! {
+        r#"
+        [project]
+        name = "project"
+        version = "0.1.0"
+        requires-python = ">=3.12"
+        "#,
+    })?;
+
+    let child = context.temp_dir.join("foo");
+    uv_snapshot!(context.filters(), context.init().current_dir(&context.temp_dir).arg(&child), @r###"
+    success: true
+    exit_code: 0
+    ----- stdout -----
+
+    ----- stderr -----
+    warning: `uv init` is experimental and may change without warning
+    Adding foo as member of workspace [TEMP_DIR]/
+    Initialized project foo in [TEMP_DIR]/foo
+    "###);
+
+    let grandchild = child.join("bar");
+    uv_snapshot!(context.filters(), context.init().current_dir(&context.temp_dir).arg(&grandchild), @r###"
+    success: true
+    exit_code: 0
+    ----- stdout -----
+
+    ----- stderr -----
+    warning: `uv init` is experimental and may change without warning
+    Adding bar as member of workspace [TEMP_DIR]/
+    Initialized project bar in [TEMP_DIR]/foo/bar
+    "###);
+
+    let workspace = fs_err::read_to_string(pyproject_toml)?;
+    insta::with_settings!({
+        filters => context.filters(),
+    }, {
+        assert_snapshot!(
+            workspace, @r###"
+        [project]
+        name = "project"
+        version = "0.1.0"
+        requires-python = ">=3.12"
+
+        [tool.uv.workspace]
+        members = ["foo", "foo/bar"]
+        "###
+        );
+    });
+
+    let pyproject = fs_err::read_to_string(child.join("pyproject.toml"))?;
+    insta::with_settings!({
+        filters => context.filters(),
+    }, {
+        assert_snapshot!(
+            pyproject, @r###"
+        [project]
+        name = "foo"
+        version = "0.1.0"
+        description = "Add your description here"
+        readme = "README.md"
+        dependencies = []
+
+        [tool.uv]
+        dev-dependencies = []
+        "###
+        );
+    });
+
+    Ok(())
+}