The check for BLI_path_normalize having succeeded only checked for a
trailing "../" which isn't correct. This caused going up a directory
in the file selector to do nothing on directories ending with "..".
This also caused an empty path to expand into "../" because
BLI_path_extension_check didn't account for this case.
Resolve using BLI_path_name_at_index which extracts the last component
of the path without having to match the the surrounding slashes.