From the directory-1.3.8.0 CHANGELOG:

Modules in directory are no longer considered Safe because the System.OsPath dependency is no longer Safe.

This means that all packages that use directory < 1.4 and import safe System.Directory are broken.

In the wild, this looks like this:

Building library for MissingH-1.5.0.1..
...
src/Network/Email/Sendmail.hs:35:1: error:
    System.Directory: Can't be safely imported!
    The module itself isn't safe.
   |
35 | import safe System.Directory
   | ^^^^^^^^^^^^^^^^^^^^^^^^^^^^...
...
Error: cabal: Failed to build MissingH-1.5.0.1

Standard action path:

• deprecate directory-1.3.8.0 on hackage
• revise it to become unbuildable
• release as directory-1.4

ATTN: @Rufflewind