please manually test your PRs.

For the generation logic we use config directory for some git logic, and the project name for generation. We need to fix it to use the config.Directory for project generation. This is a pre-existing bug, which is why it fails to create the directory locally for the init (cc @peterj)

err = templates.NewGenerator().GenerateProject(templates.ProjectConfig{
	NoGit:       initNoGit,
	Directory:   projectPath,
	Verbose:     false,
	ProjectName: projectName,
	Empty:       initEmpty,
})

// we create skill here
destPath := filepath.Join(config.ProjectName, strings.TrimSuffix(path, ".tmpl"))

if !config.NoGit {
	if err := g.initGitRepo(config.Directory, config.Verbose); err != nil {
		// Don't fail the whole operation if git init fails
		if config.Verbose {
			fmt.Printf("Warning: failed to initialize git repository: %v\n", err)
		}
	}
}

We'd need to update destPath to destPath := filepath.Join(config.Directory, strings.TrimSuffix(path, ".tmpl")).

On a side-but-relevant note, I'd prefer if this was a CLI flag as shown in the description, instead of a positional argument. Output directory is optional, so if we for any reason add any more required positional arguments, this will either get confusing (i.e. arctl skill init test "" argument2) or require breaking CLI command updates to reorder. My opinion though, not sure what others may think.

Resolved some of the comments I had made. I technically approve this, although would be better to get additional reviewer as I made some changes here.

Thanks for the contribution!

looks & works good!