slime + chokes on temporary-file-directory set to "~/temp" on Windows

I am running Windows versions Emacs and CLISP.

If I have temporary-file-directory set to "~/temp", slime loading will
report
;; Loaded file
C:\Users\977315\documents\.slime\fasl\2013-09-29\clisp-2.49-windows-x86\swank.fas
...
*** - OPEN: Directory #P"C:\\Users\\...\\documents\\.emacs.d\\~\\temp\\"
does not exist

I set temporary-file-directory to an absolute path, such as
""c:/Users/.../AppData/Local/Temp/"
slime loads OK.

I grepped slime's lisp files for temporary-file-directory, but did not see
it.  I tested this with
clisp -norc option.

Is this a bug - since on Windows Emacs accepts `~' for the home directory?

Thanks,

Mirko