From http://zsh.sourceforge.net/Doc/Release/Options.html#Completion-4

> AUTO_NAME_DIRS
> Any parameter that is set to the absolute name of a directory immediately
> becomes a name for that directory, that will be used by the ‘%~’ and
> related prompt sequences, and will be available when completion is performed
> on a word starting with ‘~’.
> (Otherwise, the parameter must be used in the form ‘~param’ first.)

Explained in more detail in
https://github.com/wayneeseguin/rvm/issues/3091#issuecomment-60083194

Related issues:
https://github.com/robbyrussell/oh-my-zsh/issues/2857
https://github.com/robbyrussell/oh-my-zsh/issues/3238
https://github.com/wayneeseguin/rvm/issues/3091