Output from “mkpasswd -c” differs with “cat /etc/passwd | grep $USER”

Question

I have noticed that my $HOME becomes different from ~ after running some SSH commands. I would like to understand what is causing this difference.

I am using Cygwin's SSH:

$ which ssh
/usr/bin/ssh

This is what I see:

$ echo $HOME
/c/Users/axxx

$ echo ~
/home/axxx

While investigating this I noticed that /etc/passwd | grep $USER differs from mkpasswd -c. I expected them to be the same, and when $HOME and ~ become distinct, ~ equals the home directory corresponding to the output of mkpasswd -c while $HOME equals the entry for the home directory in /etc/passwd.

In addition to the location of the home directory, the entries for User ID and Group ID are also distinct. There is a difference in the username also, in /etc/passwd, I noticed my username is of the form dxxx+axxx where dxxx is my machine name, while in the output of mkpasswd -c, my username is simply axxx.

[Added Later]

I noticed ~ is picked up from db_home from /etc/nsswitch.conf and $HOME corresponds to the entry in /etc/passwd.