Android Navigation Component - Setting HasOptionsMenu invalidates NavigateUp button

I'm using Android Navigation Component with a bottomNavigationView. I have configured the AppBar in my MainActivity so that a Navigate Up Button appears when the app is not on the start destination of the graph.

I have set SupportedActionBar and override onSupportNavigateUp like so:

override fun onCreate(savedInstanceState: Bundle?) {
    super.onCreate(savedInstanceState)
    binding = ActivityMainBinding.inflate(layoutInflater)
    setContentView(binding.root)
    setSupportActionBar(binding.mainToolbar)

    ...

    val controller = binding.bottomNavView.setupWithNavController(
        navGraphIds = navGraphIds,
        fragmentManager = supportFragmentManager,
        containerId = R.id.nav_host_container,
        intent = intent
    )

    controller.observe(this, Observer { navController ->
        appBarConfiguration = AppBarConfiguration(
            topLevelDestinationIds = setOf(
                navController.graph.startDestination,
                R.id.navigation_level_up_onboarding
            )
        )

        setupActionBarWithNavController(navController, appBarConfiguration)
    })
    currentController = controller
}

override fun onSupportNavigateUp(): Boolean {
    return currentController?.value?.navigateUp() ?: false
}

In the navigation graph I have a destination ProfileSettingsFragment which needs to have menu options. I have set them like so:

override fun onViewCreated(view: View, savedInstanceState: Bundle?) {
    super.onViewCreated(view, savedInstanceState)
    setHasOptionsMenu(true)

    ....
}

override fun onCreateOptionsMenu(menu: Menu, inflater: MenuInflater) {
    inflater.inflate(R.menu.profile_settings_menu, menu)
    super.onCreateOptionsMenu(menu, inflater)
}

Menu options are working fine, but, the navigateUp button stops working for this fragment as soon as I call setHasOptionsMenu(true).

What am I doing wrong? What is the proper way to add menu options on a fragment while keeping navigateUp behaviour when using Navigation Component?

Since you are using a Toolbar instead of

setupActionBarWithNavController(navController, appBarConfiguration)

you can use

toolbar.setupWithNavController(navController, appBarConfiguration)

and you do not need to override the onSupportNavigateUp() method.