For some reason `gem install` unsets the GEM_PATH environment variable internally unless the install dir is provided. This in turn means that if it invokes extconf.rb and extconf.rb depends on a gem available on the GEM_PATH (like pkg-config for nokogiri) then it's not available in that context. Proof:d8293c4729/lib/rubygems/commands/install_command.rb (L151)Blame:9ea600c9c2This is a hack that sets the :install_dir to where we would install anyways (the GEM_HOME is the default installation destination).