Emacs normal behavior when visiting a file in a non-existent directory
is to create a buffer for the file, display a message "Use M-x
make-directory RET RET to create the directory and its parents", then
switch to the new buffer.  With quilt-mode loaded, the same action
creates a buffer for the file, displays the message about
make-directory, but then quits with an error
"call-process-shell-command: Setting current directory: No such file or
directory," followed by the name of the non-existent directory.  It does
not switch to the new buffer even though the new buffer exists.

To reproduce, make sure the directory /tmp/fubar does not exist, then
execute the following command.

$ emacs -q -l quilt-mode /tmp/fubar/readme.txt

That will leave you in the scratch buffer.  Use list-buffers (C-x C-b)
to verify a buffer name readme.txt exists.  To show the expected
behavior, execute the following command.

$ emacs -q /tmp/fubar/readme.txt

That will leave you in the readme.txt buffer.