4.3.4 Resolving an Entity-Id states that

The entity-id may be expressed as an absolute IRI or relative to the service root URL.

Example 23: request the entity representation for an entity-id
http://host/service/$entity?$id=Products(0)

This was correct until we introduced type-cast segments after $entity with ODATA-528.

Now relative URLs should rather be relative to the request URL, as in all other places, especially in

4.4 Addressing References between Entities

The entity-id specified by $id may be expressed absolute or relative to the request URL.