git-apply does not work in a sub-directory of a Git repository

Hello everyone,

Recently while using git-apply, I observed that if git-apply is used in a
sub-directory of a Git repository then it silently dies without doing
anything.

Here's what I did

~ $mkdir example
~ $cd example
example $git init
Initialized empty Git repository in /home/mj/example/.git/
example $echo main >main
example $git add main
example $git commit -m 'main'
[master (root-commit) 97aeda3] main
 1 file changed, 1 insertion(+)
 create mode 100644 main
example $git checkout -b feature
Switched to a new branch 'feature'
example $echo modified >main
example $git add main
example $git commit -m 'modified'
[feature 2551fa2] modified
 1 file changed, 1 insertion(+), 1 deletion(-)
example $mkdir outgoing
example $git diff master >outgoing/feature.patch
example $git checkout master
Switched to branch 'master'
example $cd outgoing/
outgoing $git apply feature.patch
outgoing $cd ..
example $cat main
main

As you observed, patch wasn't applied. Is it intended behaviour of
git-apply? Usually to apply the patch I have to copy it to top directory
and then use git-apply.

I tried out git-am to apply the patch ("git format-patch" was used to
make patch) while being in the "outgoing" sub-directory and it worked
fine. So why does git-apply show this kind of behaviour?

Thanks,
Mehul