I also thought it was confusing that the key and entries are both stored next to the executable
I think it has to do with the fact that this tool is meant to be used on a flash drive and not necessarily installed in a computer. I think the choice to have everything in one place is justified in this case.
Maybe it just needs to have params to cover more use cases e.g. ./jern --key=/some/other/dir/for/the/key.k --entries=/some/other/dir/for/the/entries/