Remove std::env::set_current_dir() call from EngineState::merge_env() (#12922)

As discussed in https://github.com/nushell/nushell/pull/12749, we no
longer need to call `std::env::set_current_dir()` to sync `$env.PWD`
with the actual working directory. This PR removes the call from
`EngineState::merge_env()`.

crates/nu-protocol/src/engine/engine_state.rs

@@ -277,11 +277,7 @@ impl EngineState {
     }
 
     /// Merge the environment from the runtime Stack into the engine state
-    pub fn merge_env(
-        &mut self,
-        stack: &mut Stack,
-        cwd: impl AsRef<Path>,
-    ) -> Result<(), ShellError> {
+    pub fn merge_env(&mut self, stack: &mut Stack) -> Result<(), ShellError> {
         let mut config_updated = false;
 
         for mut scope in stack.env_vars.drain(..) {
@@ -311,9 +307,6 @@ impl EngineState {
             }
         }
 
-        // TODO: better error
-        std::env::set_current_dir(cwd)?;
-
         if config_updated {
             // Make plugin GC config changes take effect immediately.
             #[cfg(feature = "plugin")]