I can confirm that I am having the same issue. I am also using Eclipse classic with CDT. The funny thing is that it only started happening earlier this evening. Before then, I was always prompted for the workspace. Checking Prompt for workspace on startup has no effect. I am not launching eclipse using a startup script, so the -data flag is not set on launch. I have removed the line osgi.instance.area.default from the configuration/config.ini file, but that had no effect.
A few strange quirks that are incidental to this problem: If I delete the workspace workspace it creates it again upon launch. However, when I switch to one of my "real" workspaces I notice that the workspace workspace is not listed as an option to be switched to.
As would be expected, reinstalling Eclipse resolves the issue. But it would be nicer to find a way to fix the problem without resorting to that.