If you happen to be lax in upgrading software, you might have an older version of magit where if M-x magit-status is allowed to initialize a git repository where none was before, it has a tendency to create said repository in the directory '$HOME/repo/~/repo'.
If this happens, and one wishes to remove that annoying and non-useful '~' directory, do not, I repeat, do not run the command:
rm -r ~
That is bad. Remember shell expansion! You need to quote the tilde:
rm -r '~'
But also note that even the latter should not be done within eshell, as it seems to be intent on expanding the tilde anyway. Use a real shell.
Also, always do `ls $dir` before you do `rm $dir`, just to double-check what you're deleting. Even if you're sure, check anyway.
Because otherwise, you might accidentally delete your home directory.
On the bright side, I can now confirm my backups work.
 see bug 383