Fix collection of testpaths with `--pyargs`

Fixes https://github.com/pytest-dev/pytest/issues/4405.

changelog/4405.bugfix.rst

@@ -0,0 +1 @@
+Fix collection of testpaths with ``--pyargs``.

src/_pytest/config/__init__.py

@@ -852,10 +852,7 @@ class Config(object):
             )
             if not args:
                 if self.invocation_dir == self.rootdir:
-                    args = [
+                    args = self.getini("testpaths")
-                        str(self.invocation_dir.join(x, abs=True))
-                        for x in self.getini("testpaths")
-                    ]
                 if not args:
                     args = [str(self.invocation_dir)]
             self.args = args

testing/test_collection.py

@@ -1086,6 +1086,28 @@ def test_collect_with_chdir_during_import(testdir):
     result.stdout.fnmatch_lines(["collected 1 item"])
 
 
+def test_collect_pyargs_with_testpaths(testdir, monkeypatch):
+    testmod = testdir.mkdir("testmod")
+    # NOTE: __init__.py is not collected since it does not match python_files.
+    testmod.ensure("__init__.py").write("def test_func(): pass")
+    testmod.ensure("test_file.py").write("def test_func(): pass")
+
+    root = testdir.mkdir("root")
+    root.ensure("pytest.ini").write(
+        textwrap.dedent(
+            """
+        [pytest]
+        addopts = --pyargs
+        testpaths = testmod
+    """
+        )
+    )
+    monkeypatch.setenv("PYTHONPATH", str(testdir.tmpdir))
+    with root.as_cwd():
+        result = testdir.runpytest_subprocess()
+    result.stdout.fnmatch_lines(["*1 passed in*"])
+
+
 @pytest.mark.skipif(
     not hasattr(py.path.local, "mksymlinkto"),
     reason="symlink not available on this platform",