Minimal reproduction project for "Unprefixed Hosting Environment Variable is ignored"

1. Create a new web project

dotnet new web

2. Run it setting "ENVIRONMENT" environment variable

export ENVIRONMENT=Repro && dotnet run

3. Search the logs for Hosting environment:

I was leaning toward assuming that the variable is ignored since it's overridden by launchSettings. But first, deleting launchSettings doesn't make a difference in the problem (only changing Development to Production). And for other variables unprefixed variables take precedence over variables prefixed with ASPNETCORE_