Not sure where/why you're seeing
gems/gems, those do not appear in the Opalstack Passenger HOWTO.
gems/gems looks like an artifact from WF to me. Did you maybe copy something over from WF? Try searching your source, ie
grep -R "gems/gems" ~/apps/appname and you might find some config that needs to be updated or cleared out.
/home/user/apps/appname/env is the
GEM_HOME for the initial setup, ie that's where Rails gets installed so you can run
rails new whatever to bootstrap an application.
When you run
bundler you do that from within your project directory eg:
bundle exec whatever