/abc/.htpasswd => results in 403
/.htpasswd => exposes encrypted passwords
So there's a conditional at line 1478 of bozohttpd that can bypass the check_special_files call. Basename is null in the case of "/.htpasswd" for some reason and the call is therefore bypassed.
(Additionally, the "|| basename[1]" part of the if clause seems to make assumptions of the contents of basename[0] and it seems could lead to bypassing the check_special_files call in the case of one-character-long directory names; but this statement needs more research)
JP