`rmd_subdir` not working in bookdown


My project folder is set up as follows:

text/ # full of .rmd files

bookdown.yml looks like this:

rmd_subdir: yes
date: "April 20, 2018"
  number_sections: false
bibliography: biblio.bib
biblio-style: "apalike"
link-citations: true

When I run render_book("foo.rmd") I get this error:

No input R Markdown files found from the current directory "..."
or in the rmd_files field of _bookdown.yml

I thought rmd_subdir: yes was supposed to get around this problem? It doesnt appear to be working.

Using bookdown v 0.7


Update: I think its just not looking for _bookdown.yml at all. Why would it be avoiding this?