test: remove --root option and fix TMP_DIRECTORY cleanup

The primary motivation here is to fix TMP_DIRECTORY cleanup prior to
running each test when the current working directory is not the test
subdirectory. Tests with failures would leave their TMP_DIRECTORY
directory behind for debugging, and repeated out-of-tree test runs
would have old temp directories. (This lead to e.g. T310-emacs.sh
hanging because emacs would prompt for overwriting files.)

We remove the likely anyway defunct --root test option while at it,
just to be on the safe side when doing 'rm -rf' on the TMP_DIRECTORY.