Reproduction recipe
===================
Test System: Ubuntu 12.10 (apache 2.2)
Subversion 1.8.4, Wandisco binaries, http://opensource.wandisco.com/ubuntu/dists/precise/svn18/binary-amd64/

1. Setup a repository named 'repos_old', accesible through apache http
[[[
:~$ apt-get install apache2
:~$ apt-get install libapache2-svn
:~$ apt-get install subversion
:~$ nano /etc/apache2/sites-enabled/001-svn
---- enter these contents, replace <username> ----
<Location /svn>
    DAV svn
    SVNParentPath "/home/<username>/svnparent"
    Allow from all
</Location>
------------------------------
:~$ mkdir svnparent
:~$ cd svnparent
:~/svnparent$ svnadmin create repos_old
:~/svnparent$ cd ..
:~$ chown -R www-data svnparent/
:~$ chgrp -R www-data svnparent/
:~$ /etc/init.d/apache2 restart
]]]

2. Setup working copy whose target is not the repository root

[[[
:~$ svn co http://localhost/svn/repos_old repos_root_wc
Checked out revision 0.

:~$ cd repos_root_wc
:~/repos_root_wc$ mkdir -p realdir
:~/repos_root_wc$ echo y > realdir/y
:~/repos_root_wc$ svn add realdir
:~/repos_root_wc$ svn ci -mm
:~/repos_root_wc$ cd ..

:~$ svn co http://localhost/svn/repos_old/realdir realdir
A    realdir/y
Checked out revision 1.
]]]

3. Rename the repository db folder to simulate a repos migration

[[[
:~$ cd svnparent
:~/svnparent$ mv repos_old repos_new
:~/svnparent$ cd ..
]]]

4. Add a redirect rule to apache configuration:

[[[
:~$ nano /etc/apache2/sites-enabled/001-svn
---- add this line to the end ----
RedirectMatch permanent ^/svn/repos_old(.*)$ /svn/repos_new$1
----------------------------------
:~$ /etc/init.d/apache2 restart
]]]

5. Update the working copy with a version 1.8.4 client

[[[
:~$ svn --version
svn, version 1.8.4 (r1534716)
   compiled Nov  1 2013, 15:46:49 on x86_64-unknown-linux-gnu

:~$ svn update realdir
Updating 'realdir':
Redirecting to URL 'http://localhost/svn/repos_new/realdir':
svn: E155024: Invalid relocation destination: 'http://localhost/svn/repos_new' (does not point to target)
]]]

The expected behavior is what would happen with a 1.7.5 client
[[[
:~$ svn --version
svn, version 1.7.5 (r1336830)
   compiled Jun 22 2013, 03:54:07
   
:~$ svn update realdir
Updating 'realdir':
Redirecting to URL 'http://localhost/svn/repos_new/realdir':
At revision 1.
]]]