That’s because of the dot context I mentioned. Inside the with block, the dot is the page of authors/foo/_index.md. So the .Permalink would be correct, pointing to yoursite.com/authors/foo/. It will be looking for the .Params.authors in the frontmatter of authors/foo/_index.md as well however, which probably does not exist (since it would actually be in your content/posts/whatever.md).
It should work. If it doesn’t, have a read over at Requesting Help as we probably need to see more of your code to help. What version of Hugo are you using?