[Refactor] Improve readability of relativizePath

[gonzaloriestra]

WHY are these changes introduced?

The relativizePath function used an imperative if/else structure and somewhat cryptic variable names, making it harder to read and maintain than necessary.

WHAT is this pull request doing?

Refactors relativizePath to:

• Use early returns instead of nested logic.
• Use more descriptive variable names (commonParent, upLevels).
• Improve code clarity without changing observable behavior.

How to test your changes?

CI

Post-release steps

Checklist

• I've considered possible cross-platform impacts (Mac, Linux, Windows)
• I've considered possible documentation changes
• I've considered analytics changes to measure impact
• The change is user-facing — I've identified the correct bump type (patch for bug fixes · minor for new features · major for breaking changes) and added a changeset with pnpm changeset add

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PR created automatically by Jules for task 10987431837561304026 started by @gonzaloriestra

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