Answering own question: App was built with Automatically Managed Signing. Changing to Manual signing fixed the problem.

I'm having a similar issue. Was this ever resolved for you?

No, SKTerminateForInvalidReceipt does not validate receipts. All it does it terminate the app with error code 173. it is equivalent to calling exit(173).

I have noticed that, on (10.15 and 11.0) if signed with Mac Development ceritficate or official Mac App Store distribution cert, the alert WILL pop up (although with errors in Console). But if signed with Develoepr ID, it will not pop up.