Variables from artifacts:reports:dotenv not expanded in job variables block

[Chew Chee Ming]

Executed with gitlab-ci-local --cwd . with the following .gitlab-ci.yml file
Minimal .gitlab-ci.yml illustrating the issue

$ cat .gitlab-ci.yml
build1:
  stage: build
  image: alpine
  script:
    - echo "PARAM1=abc123" >> test1.env
  artifacts:
    reports:
      dotenv: test1.env

test1:
  stage: test
  image: alpine
  variables:
    PARAM2: 'hello:${PARAM1}'
  script:
    - echo build_image1=${PARAM2}
    - echo build_image2="world:${PARAM1}"

Expected behavior (as tested in Gitlab.com) for test1 job, PARAM1 should be expanded, check the line that runs the command echo build_image1=${PARAM2}

Running with gitlab-runner 17.7.0~pre.103.g896916a8 (896916a8)
  on green-3.saas-linux-small-amd64.runners-manager.gitlab.com/default Jhc_Jxvh, system ID: s_0e6850b2bce1

Preparing the "docker+machine" executor
00:06
Using Docker executor with image alpine ...
Pulling docker image alpine ...
Using docker image sha256:b0c9d60fc5e3fa2319a86ccc1cdf34c94c7e69766e8cebfb4111f7e54f39e8ff for alpine with digest alpine@sha256:56fa17d2a7e7f168a043a2712e63aed1f8543aeafdcee47c58dcffe38ed51099 ...

Preparing environment
00:00
Running on runner-jhcjxvh-project-66365610-concurrent-0 via runner-jhcjxvh-s-l-s-amd64-1738663680-ad04a05d...

Getting source from Git repository
00:01
Fetching changes with git depth set to 20...
Initialized empty Git repository in /builds/canterly/oidc-test1/.git/
Created fresh repository.
Checking out bef15ffe as detached HEAD (ref is main)...
Skipping Git submodules setup
$ git remote set-url origin "${CI_REPOSITORY_URL}"

Executing "step_script" stage of the job script
00:01
Using docker image sha256:b0c9d60fc5e3fa2319a86ccc1cdf34c94c7e69766e8cebfb4111f7e54f39e8ff for alpine with digest alpine@sha256:56fa17d2a7e7f168a043a2712e63aed1f8543aeafdcee47c58dcffe38ed51099 ...
$ echo build_image1=${PARAM2}
build_image1=hello:abc123
$ echo build_image2="world:${PARAM1}"
build_image2=world:abc123

Cleaning up project directory and file based variables
00:00
Job succeeded

Actual behavior with gitlab-ci-local for test1 job, PARAM1 is not expanded (check the line that runs the command echo build_image1=${PARAM2})

$ gitlab-ci-local --cwd .
parsing and downloads finished in 29 ms.
json schema validated in 58 ms
build1 starting alpine:latest (build)
build1 copied to docker volumes in 342 ms
build1 $ echo "PARAM1=abc123" >> test1.env
build1 finished in 2.21 s
build1 exported artifacts in 297 ms
build1 copied artifacts to cwd in 21 ms
test1  starting alpine:latest (test)
test1  copied to docker volumes in 250 ms
test1  imported artifacts in 28 ms
test1  $ echo build_image1=${PARAM2}
test1  > build_image1=hello:
test1  $ echo build_image2="world:${PARAM1}"
test1  > build_image2=world:abc123
test1  finished in 552 ms

 PASS  build1
 PASS  test1
pipeline finished in 3.2 s

Host information
macOS Sequoia
gitlab-ci-local 4.56.2 and 4.57.0

Containerd binary
N/A

Additional context
N/A