Hey, this does look like an interesting edge case. A few thoughts:

• The Project References version still didn't work correctly. It showed you the reference to apps/web but not the one in apps/docs.
• Having to press "Go to references" twice for it to work doesn't really seem like the way it should work either. 😄
• It's interesting that you're the first to mention this after we've been recommending this strategy for years. I'm left wondering how much this matters in practice, given that there are likely thousands of developers working in codebases set up this way at this point. That's not to say this isn't a problem (it is), but that maybe it's not as impactful day-to-day given the first two points that it doesn't work right either with Project References. The delta between the two setups doesn't seem that large. Neither of them work how I'd expect for this case.
• I was interested to see if this was an issue with Just-in-Time Packages and I'm seeing the same behavior after converting the package to a Compiled Package, so that doesn't help.
• After talking to a lot of people about TypeScript in Workspaces, it's pretty clear people don't like Project References. The recommendations in the Turborepo documentation come from learning from the community about what works, what doesn't, and what people seem to prefer. Ultimately, if you prefer a different approach, you can use it!
• Really, what we need is: Infer project references from common monorepo patterns / tools microsoft/TypeScript#25376