broken_cd.sh

#!/bin/bash
set -e # works without this
set -x # debug

source "$HOME/.rvm/scripts/rvm" #so 'cd' will change gemset when dotfiles present

#setup
rm -rf ~/tmp/dir_with_gemfile
mkdir -p ~/tmp/dir_with_gemfile

echo "source 'https://rubygems.org'" > ~/tmp/dir_with_gemfile/Gemfile
echo "gem 'rails'" >> ~/tmp/dir_with_gemfile/Gemfile
#end setup

#works
echo 'pre cd ~'
cd ~
echo 'post cd ~'

#exits after "cd"
echo 'pre cd ~/tmp/dir_with_gemfile'
cd ~/tmp/dir_with_gemfile
echo 'post cd ~/tmp/dir_with_gemfile'

output

>./broken_cd.sh
pre cd ~
post cd ~
pre cd ~/tmp/dir_with_gemfile