Thank you Thierry, wanted to update this thread with the Feedback Reporter item ID you created: FEEDBACK ASSISTANT ID: 11657901

Also, changing the .xcconfig files and their folders in Xcode from relative to Group to relative to project also worked :).

Apparently, if you change the config reference from relative to the root folder where the xcodeporj file is located to relative to the current .xcconfig file in the example it works again. #include "InnerXcconfig/innerInnerB/t.xcconfig" —> #include "../innerInnerB/t.xcconfig" Do you know which WWDC session covered this?

Fixed in the final Xcode 13.0 build.

The change has been reverted in SwiftPM (Xcode 13 beta 5 for sure) so now this problem should not affect apps and libraries anymore (although some libraries like Firebase had already adapted successfully to it)

The change has been reverted in SwiftPM so now this problem should not affect apps and libraries anymore (although some libraries like Firebase had already adapted successfully to it).

Bug seems to be fixed when updating the the latest betas of macOS 12 and iOS 15.