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I've also tried switching to default secrets provider and back, same result

why are you unsetting the passphrase before running the change?

Just trying to showcase that it doesn't work both ways, with passphase file present and absent

There’s a PR open to fix this issue <@U025YKY9PQC> 

<https://github.com/pulumi/pulumi/pull/7347|https://github.com/pulumi/pulumi/pull/7347>