diff --git a/tools/export/gnuarmeclipse/__init__.py b/tools/export/gnuarmeclipse/__init__.py
index 9b9ce43116d..bb94d4200f2 100644
--- a/tools/export/gnuarmeclipse/__init__.py
+++ b/tools/export/gnuarmeclipse/__init__.py
@@ -361,9 +361,6 @@ def compute_exclusions(self):
         - recurse the tree and collect all unused folders; descend
         the hierarchy only for used nodes
         """
-        source_folders = [self.filter_dot(s) for s in set(dirname(
-            src) for src in self.resources.c_sources + self.resources.cpp_sources + self.resources.s_sources)]
-
         self.excluded_folders = set(self.resources.ignored_dirs) - set(self.resources.inc_dirs)
 
 
diff --git a/tools/resources/__init__.py b/tools/resources/__init__.py
index f49af77259d..9bc6be38c02 100644
--- a/tools/resources/__init__.py
+++ b/tools/resources/__init__.py
@@ -379,8 +379,8 @@ def add_directory(
             base_path = path
         if into_path is None:
             into_path = path
-        if self._collect_ignores and path in self.ignored_dirs:
-            self.ignored_dirs.remove(path)
+        if self._collect_ignores and relpath(path, base_path) in self.ignored_dirs:
+            self.ignored_dirs.remove(relpath(path, base_path))
         if exclude_paths:
             self.add_ignore_patterns(
                 path, base_path, [join(e, "*") for e in exclude_paths])
@@ -392,7 +392,7 @@ def add_directory(
                 self._ignoreset.add_mbedignore(
                     real_base, join(root, IGNORE_FILENAME))
 
-            root_path =join(relpath(root, base_path))
+            root_path = join(relpath(root, base_path))
             if self._ignoreset.is_ignored(join(root_path,"")):
                 self.ignore_dir(root_path)
                 dirs[:] = []
@@ -407,11 +407,11 @@ def add_directory(
                 if (any(self._not_current_label(d, t) for t
                         in self._labels.keys())):
                     self._label_paths.append((dir_path, base_path, into_path))
-                    self.ignore_dir(dir_path)
+                    self.ignore_dir(relpath(dir_path, base_path))
                     dirs.remove(d)
                 elif (d.startswith('.') or d in self._legacy_ignore_dirs or
                       self._ignoreset.is_ignored(join(root_path, d, ""))):
-                    self.ignore_dir(dir_path)
+                    self.ignore_dir(relpath(dir_path, base_path))
                     dirs.remove(d)
 
             # Add root to include paths