I'm surprised that this worked, because grub configuration normally needs
to list paths relative to the root of the /boot partition, not paths
relative to the root of the overall system (which makes sense, because
grub runs before any partitions have been mounted, and is acting on an
individual partition's filesystem).
Please could you talk to upstream about this, on their bug tracker at
<https://github.com/ostreedev/ostree/issues>?
I don't use ostree system-wide myself (my use-case for it is as a backend
for Flatpak) so I am not really able to provide support for that use-case,
and I suspect that the ostree-boot README is outdated.
smcv