You asked the same question over on the Fedora forums. I'll give the same answer here:
You embed the full path into the archive.
This can make it more problematical when you try to extract a single file - with the full path embedded it has to go back to exactly where it was, which doesn't work if the files are to be restored to a different username on a different system.
It isn't a problem if that is exactly what you want to do - every time.
Most such extractions I have done though, require the extracted file to be separate - it may be because I need to do a diff between the backed up file, and the current file.
This happens so often that tar even removes the leading "/" to make such use possible even with the full path specified. You can override tars removal, but it saves time.