Docker-compose toolbox secrets files not mounting properly

Question

I am trying to compose a stack using secrets for development, i use local files in docker/secrets/FILE_NAME I had this working in windows 10, but I'm struggling to get it to work under win7 toolbox. I get an error:

Cannot create container for service db: 
invalid volume specification:
 'C:\project\docker\secrets\DB_USERNAME:/run/secrets/db-username:ro'

I was trying to set COMPOSE_CONVERT_WINDOWS_PATH but unfortunately, this does not change anything. I will get the same output with true or false. Setting absolute paths did not help either.

Docker compose version 1.16.1 build 6d1ac219 Docker version 17.10.0-ce, build f4ffd25

My docker-compose.yml

version: '3.3'

services:
  db:
    image: postgres
    volumes:
      - db-data:/var/lib/postgresql/data
    environment:
      - POSTGRES_PASSWORD_FILE=/run/secrets/db-password
      - POSTGRES_USER_FILE=/run/secrets/db-username
      - POSTGRES_DB_FILE=/run/secrets/db-name
    secrets:
      - db-username
      - db-password
      - db-name
  web:
    build: 
      context: ./docker/machines/django/
      args:
        buildno: 1
    command: python3 manage.py runserver 0.0.0.0:8000
    volumes:
      - ./Server:/Server
    ports:
      - "8000:8000"
    depends_on:
      - db
    secrets:
      - db-username
      - db-password
      - db-name

secrets:
  db-username:
    file: ./docker/secrets/DB_USERNAME
  db-password:
    file: ./docker/secrets/DB_PASSWORD
  db-name:
    file: ./docker/secrets/DB_NAME

volumes:
  db-data:
    driver: "local"