This issue has returned in Xcode 14.0.1 and 14.1 RC. It had been fixed in the GM of 13.3, and remained fixed through 13.4.1. Now it is back, presenting exactly as described above.

Forgot to mention that after my original post, the issue was fixed in the GM of Xcode 13.3, and continued to be fixed through 13.4.1, which is what my team is currently using on CI. We want to move to 14 or 14.1 now, but can't because this issue has returned in those versions.

This issue has returned in Xcode 14.0.1 and 14.1 Beta 3. I haven't yet tested 14.1 RC. Issue presents exactly the same as described above.