diff --git a/bundle/config/mutator/apply_presets.go b/bundle/config/mutator/apply_presets.go
index a376e303..9cec704e 100644
--- a/bundle/config/mutator/apply_presets.go
+++ b/bundle/config/mutator/apply_presets.go
@@ -223,11 +223,8 @@ func (m *applyPresets) Apply(ctx context.Context, b *bundle.Bundle) diag.Diagnos
 	}
 
 	if config.IsExplicitlyEnabled((b.Config.Presets.SourceLinkedDeployment)) {
-		root := b.SyncRootPath
-		isInWorkspace := strings.HasPrefix(root, "/Workspace/")
-		if isInWorkspace && dbr.RunsOnRuntime(ctx) {
-			b.Config.Workspace.FilePath = root
-		} else {
+		isDatabricksWorkspace := dbr.RunsOnRuntime(ctx) && strings.HasPrefix(b.SyncRootPath, "/Workspace/")
+		if !isDatabricksWorkspace {
 			disabled := false
 			b.Config.Presets.SourceLinkedDeployment = &disabled
 			diags = diags.Extend(diag.Warningf("source-linked deployment is available only in the Databricks Workspace"))
diff --git a/bundle/config/mutator/apply_presets_test.go b/bundle/config/mutator/apply_presets_test.go
index 8aa2addd..dc56c27f 100644
--- a/bundle/config/mutator/apply_presets_test.go
+++ b/bundle/config/mutator/apply_presets_test.go
@@ -377,75 +377,63 @@ func TestApplyPresetsSourceLinkedDeployment(t *testing.T) {
 	testContext := context.Background()
 	enabled := true
 	disabled := false
-	remotePath := "/Users/files"
 	workspacePath := "/Workspace/user.name@company.com"
 
 	tests := []struct {
-		bundlePath       string
-		ctx              context.Context
-		name             string
-		initialValue     *bool
-		expectedValue    *bool
-		expectedFilePath string
-		expectedWarning  string
+		bundlePath      string
+		ctx             context.Context
+		name            string
+		initialValue    *bool
+		expectedValue   *bool
+		expectedWarning string
 	}{
 		{
-			name:             "preset enabled, bundle in Workspace, databricks runtime",
-			bundlePath:       workspacePath,
-			ctx:              dbr.MockRuntime(testContext, true),
-			initialValue:     &enabled,
-			expectedValue:    &enabled,
-			expectedFilePath: workspacePath,
-			expectedWarning:  "",
+			name:          "preset enabled, bundle in Workspace, databricks runtime",
+			bundlePath:    workspacePath,
+			ctx:           dbr.MockRuntime(testContext, true),
+			initialValue:  &enabled,
+			expectedValue: &enabled,
 		},
 		{
-			name:             "preset enabled, bundle not in Workspace, databricks runtime",
-			bundlePath:       "/Users/user.name@company.com",
-			ctx:              dbr.MockRuntime(testContext, true),
-			initialValue:     &enabled,
-			expectedValue:    &disabled,
-			expectedFilePath: remotePath,
-			expectedWarning:  "source-linked deployment is available only in the Databricks Workspace",
+			name:            "preset enabled, bundle not in Workspace, databricks runtime",
+			bundlePath:      "/Users/user.name@company.com",
+			ctx:             dbr.MockRuntime(testContext, true),
+			initialValue:    &enabled,
+			expectedValue:   &disabled,
+			expectedWarning: "source-linked deployment is available only in the Databricks Workspace",
 		},
 		{
-			name:             "preset enabled, bundle in Workspace, not databricks runtime",
-			bundlePath:       workspacePath,
-			ctx:              dbr.MockRuntime(testContext, false),
-			initialValue:     &enabled,
-			expectedValue:    &disabled,
-			expectedFilePath: remotePath,
-			expectedWarning:  "source-linked deployment is available only in the Databricks Workspace",
+			name:            "preset enabled, bundle in Workspace, not databricks runtime",
+			bundlePath:      workspacePath,
+			ctx:             dbr.MockRuntime(testContext, false),
+			initialValue:    &enabled,
+			expectedValue:   &disabled,
+			expectedWarning: "source-linked deployment is available only in the Databricks Workspace",
 		},
 		{
-			name:             "preset disabled, bundle in Workspace, databricks runtime",
-			bundlePath:       workspacePath,
-			ctx:              dbr.MockRuntime(testContext, true),
-			initialValue:     &disabled,
-			expectedValue:    &disabled,
-			expectedFilePath: remotePath,
+			name:          "preset disabled, bundle in Workspace, databricks runtime",
+			bundlePath:    workspacePath,
+			ctx:           dbr.MockRuntime(testContext, true),
+			initialValue:  &disabled,
+			expectedValue: &disabled,
 		},
 		{
-			name:             "preset nil, bundle in Workspace, databricks runtime",
-			bundlePath:       workspacePath,
-			ctx:              dbr.MockRuntime(testContext, true),
-			initialValue:     nil,
-			expectedValue:    nil,
-			expectedFilePath: remotePath,
+			name:          "preset nil, bundle in Workspace, databricks runtime",
+			bundlePath:    workspacePath,
+			ctx:           dbr.MockRuntime(testContext, true),
+			initialValue:  nil,
+			expectedValue: nil,
 		},
 	}
 
 	for _, tt := range tests {
 		t.Run(tt.name, func(t *testing.T) {
 			b := &bundle.Bundle{
-				SyncRoot:     vfs.MustNew(tt.bundlePath),
 				SyncRootPath: tt.bundlePath,
 				Config: config.Root{
 					Presets: config.Presets{
 						SourceLinkedDeployment: tt.initialValue,
 					},
-					Workspace: config.Workspace{
-						FilePath: remotePath,
-					},
 				},
 			}
 
@@ -458,7 +446,6 @@ func TestApplyPresetsSourceLinkedDeployment(t *testing.T) {
 				require.Equal(t, tt.expectedWarning, diags[0].Summary)
 			}
 
-			require.Equal(t, tt.expectedFilePath, b.Config.Workspace.FilePath)
 			require.Equal(t, tt.expectedValue, b.Config.Presets.SourceLinkedDeployment)
 		})
 	}
diff --git a/bundle/config/mutator/process_target_mode_test.go b/bundle/config/mutator/process_target_mode_test.go
index d6985bda..bf2129f9 100644
--- a/bundle/config/mutator/process_target_mode_test.go
+++ b/bundle/config/mutator/process_target_mode_test.go
@@ -524,14 +524,12 @@ func TestSourceLinkedDeploymentEnabled(t *testing.T) {
 	b, diags := processSourceLinkedBundle(t, true)
 	require.NoError(t, diags.Error())
 	assert.True(t, *b.Config.Presets.SourceLinkedDeployment)
-	assert.Equal(t, b.Config.Workspace.FilePath, b.SyncRootPath)
 }
 
 func TestSourceLinkedDeploymentDisabled(t *testing.T) {
 	b, diags := processSourceLinkedBundle(t, false)
 	require.NoError(t, diags.Error())
 	assert.False(t, *b.Config.Presets.SourceLinkedDeployment)
-	assert.NotEqual(t, b.Config.Workspace.FilePath, b.SyncRootPath)
 }
 
 func processSourceLinkedBundle(t *testing.T, presetEnabled bool) (*bundle.Bundle, diag.Diagnostics) {
@@ -542,7 +540,6 @@ func processSourceLinkedBundle(t *testing.T, presetEnabled bool) (*bundle.Bundle
 	b := mockBundle(config.Development)
 
 	workspacePath := "/Workspace/lennart@company.com/"
-	b.SyncRoot = vfs.MustNew(workspacePath)
 	b.SyncRootPath = workspacePath
 	b.Config.Presets.SourceLinkedDeployment = &presetEnabled
 
diff --git a/bundle/config/mutator/translate_paths.go b/bundle/config/mutator/translate_paths.go
index 321fa5b3..1e2484c7 100644
--- a/bundle/config/mutator/translate_paths.go
+++ b/bundle/config/mutator/translate_paths.go
@@ -11,6 +11,7 @@ import (
 	"strings"
 
 	"github.com/databricks/cli/bundle"
+	"github.com/databricks/cli/bundle/config"
 	"github.com/databricks/cli/libs/diag"
 	"github.com/databricks/cli/libs/dyn"
 	"github.com/databricks/cli/libs/notebook"
@@ -103,8 +104,13 @@ func (t *translateContext) rewritePath(
 		return fmt.Errorf("path %s is not contained in sync root path", localPath)
 	}
 
-	// Prefix remote path with its remote root path.
-	remotePath := path.Join(t.b.Config.Workspace.FilePath, filepath.ToSlash(localRelPath))
+	var workspacePath string
+	if config.IsExplicitlyEnabled(t.b.Config.Presets.SourceLinkedDeployment) {
+		workspacePath = t.b.SyncRootPath
+	} else {
+		workspacePath = t.b.Config.Workspace.FilePath
+	}
+	remotePath := path.Join(workspacePath, filepath.ToSlash(localRelPath))
 
 	// Convert local path into workspace path via specified function.
 	interp, err := fn(*p, localPath, localRelPath, remotePath)