The file name was incorrect, so it was having no effect. Also, the sandbox environment that this was supposed to be ignoring is deprecated. Probably best to just drop it entirely.
This change was introduced in 3bb4e51184, where it was marked as changed due to a typo. However, that is the correct name of this particular virtual environment. See https://hackage.haskell.org/package/virthualenv
3bb4e51184
Abizer Nasir