These are run from the project's web root, example/web, so that drush can run, but the database itself is stored outside the web root, example/db.
On the export side:
drush sql-dump > ../db/development.sql
On the import side:
drush sql-connect < ../db/development.sql
expands to:
mysql -hlocalhost -uexample -pyMsx2rIP drupal-example < ../db/development.sql
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