diff --git a/crates/extension_host/src/wasm_host/wit/since_v0_0_6.rs b/crates/extension_host/src/wasm_host/wit/since_v0_0_6.rs
index cd731372276..8f81802ad2c 100644
--- a/crates/extension_host/src/wasm_host/wit/since_v0_0_6.rs
+++ b/crates/extension_host/src/wasm_host/wit/since_v0_0_6.rs
@@ -56,7 +56,13 @@ impl From<SettingsLocation> for latest::SettingsLocation {
     fn from(value: SettingsLocation) -> Self {
         Self {
             worktree_id: value.worktree_id,
-            path: value.path,
+            // Passing the path here causes project settings reads to fail,
+            // since the extension passes the absolute path to the worktree,
+            // not a relative one like the settings API expects.
+            //
+            // This has been fixed in the API itself as of v0.2.0. Align the behavior
+            // here so that older extensions can also read project settings.
+            path: String::new(),
         }
     }
 }
diff --git a/crates/extension_host/src/wasm_host/wit/since_v0_1_0.rs b/crates/extension_host/src/wasm_host/wit/since_v0_1_0.rs
index 83ba2ad3dfd..88bcfeff8ba 100644
--- a/crates/extension_host/src/wasm_host/wit/since_v0_1_0.rs
+++ b/crates/extension_host/src/wasm_host/wit/since_v0_1_0.rs
@@ -77,7 +77,13 @@ impl From<SettingsLocation> for latest::SettingsLocation {
     fn from(value: SettingsLocation) -> Self {
         Self {
             worktree_id: value.worktree_id,
-            path: value.path,
+            // Passing the path here causes project settings reads to fail,
+            // since the extension passes the absolute path to the worktree,
+            // not a relative one like the settings API expects.
+            //
+            // This has been fixed in the API itself as of v0.2.0. Align the behavior
+            // here so that older extensions can also read project settings.
+            path: String::new(),
         }
     }
 }