We used something just like that to map users' home directories, but it doesn't solve the problem of not being able to set a unique root directory for each user case. Nginx accepts just one root dir setting, and it can't be conditionally set (or overwritten in a later if-else scenario) by putting it inside a location clause. One solution is to globally set /home as the definite root for all user location cases, but this does not sit alright with me - the document root should just not sit outside the target's home.