Yes, "dot", not "dot-dot". What happens when you...?
grep foo ../*/*.c
You start with your ".", then go up, and then down to anywhere you can. One of those places is ".", isn't it?
As part of the work we are doing to make the system more efficient regarding file operations, actually as a side-effect, we got "." right.
Our system takes any relative path given, prefixes the path for the current working directory, cleans up the name, and then tries to use that name. Note how this removes not just ".." but also ".". Name resolution has not even started.
When it starts, it would check the mount table and also your ".". If your file is under the path for ".", that file is used as a starting point for the walk to reach the named file; that is, there are no dots in file names used by the kernel but you still have a current working directory.
If you look again at the command above, you'll notice how all files under your current directory won't be resolved by going up just to go back to where you were.