Wow… just discovering that file name length is limited on encrypted file system… 
(I though that was only a typical Windows limitation ;))
Please note that in your DS install folder, you can add a configuration/spm.properties file to configure where the packages are installed/loaded by DS.
Sample content:
SPMInstalledRepository=/path/to/my/packages
Default is $HOME/legato/packages
Please note that if you change the folder, you can’t just move the packages. You’ll have to install the packages properly again (because typically Yocto toolchains are installed with absolute path references and can’t be moved)