Not sure if it’s a bug. The relative format looks pretty odd, but I would say some people would prefer to see the full path with absolute paths at least. Clipping it off at file level loses information.
[[link name]] is basically a shorthand for [link name](link name), kind of like auto-links: www.google.com, links whose display text is the same as their destination. If you write www.google.com/images , I’m not sure how many people would just want to see “images” as the link text.
I agree that ../Parenting MOC looks bad, but I’m not sure that we should omit the path for full paths either (or even only the relative ones). Consider paths like ../otherFolder/otherItem, in this case if only otherItem is shown, some info gets lost in preview, probably unintended. You can always change display text with the Markdown syntax ([Parenting](../Parenting MOC) or the pipe syntax, if you want to have control over how the preview looks.