Xdebug ignoring XDEBUG_CONFIG set in docker-compose.yml

I have a docker-compose file that has the XDEBUG_CONFIG environment variable configured, but Xdebug is ignoring it. When I output xdebug_info(); it says "no value" for xdebug.idekey. XDEBUG_MODE is being read correctly though.

If I set the idekey in my .ini file, it works.

PHP 7.4
Xdebug 3.1.2

services:
    app:
        build:
            context: ./docker
            args:
                WWWUSER: ${WWWUSER:-1000}
                WWWGROUP: ${WWWGROUP:-1000}
        environment:
            PHP_IDE_CONFIG: "serverName=${PHP_IDE_CONFIG:-localhost}"
            XDEBUG_CONFIG: "idekey=VSCODE"
            XDEBUG_MODE: '${XDEBUG_MODE:-debug,develop}'
        volumes:
            - .:/var/www/html
            - ./docker/php/local.ini:/usr/local/etc/php/conf.d/local.ini
            - ./docker/php/xdebug.ini:/usr/local/etc/php/conf.d/xdebug.ini
            - ./docker/php/php.ini-development:/usr/local/etc/php/php.ini
        depends_on:
            - mysql
            - redis
            - nginx

Here's my full docker-compose.yml

version: '3.9'

services:
    app:
        build:
            context: ./docker
            args:
                WWWUSER: ${WWWUSER:-1000}
                WWWGROUP: ${WWWGROUP:-1000}
        environment:
            PHP_IDE_CONFIG: "serverName=${PHP_IDE_CONFIG:-localhost}"
            XDEBUG_CONFIG: "idekey=VSCODE"
            XDEBUG_MODE: '${XDEBUG_MODE:-debug,develop}'
        volumes:
            - .:/var/www/html
            - ./docker/php/local.ini:/usr/local/etc/php/conf.d/local.ini
            - ./docker/php/xdebug.ini:/usr/local/etc/php/conf.d/xdebug.ini
            - ./docker/php/php.ini-development:/usr/local/etc/php/php.ini
        depends_on:
            - mysql
            - redis
            - nginx

    mysql:
        image: mysql:8.0
        environment:
            MYSQL_DATABASE: '${DB_DATABASE}'
            MYSQL_ROOT_PASSWORD: '${DB_PASSWORD}'
            MYSQL_USER: '${DB_USERNAME}'
            MYSQL_PASSWORD: '${DB_PASSWORD}'
            MYSQL_ALLOW_EMPTY_PASSWORD: 'yes'
        volumes:
            - mysql-data:/var/lib/mysql
            - ./docker/mysql:/docker-entrypoint-initdb.d
        ports:
            - ${FORWARD_DB_PORT:-3306}:3306
        healthcheck:
            test: ["CMD", "mysqladmin", "ping"]

    redis:
        image: redis:alpine
        volumes:
            - redis-data:/data
        ports:
            - ${FORWARD_REDIS_PORT:-6379}:6379
        healthcheck:
            test: ["CMD", "redis-cli", "ping"]

    nginx:
        image: nginx:alpine
        volumes:
            - .:/var/www/html
            - ./docker/nginx/conf.d:/etc/nginx/conf.d
        ports:
            - ${NGINX_PORT:-80}:80

volumes:
    mysql-data:
        driver: local
    redis-data:
        driver: local

And my Dockerfile

FROM php:7.4-fpm

# Install extensions
ADD https://github.com/mlocati/docker-php-extension-installer/releases/latest/download/install-php-extensions /usr/local/bin/
RUN chmod +x /usr/local/bin/install-php-extensions && \
    install-php-extensions \
    gd \
    xdebug \
    memcached \
    imagick \
    @composer \
    pdo_mysql \
    exif \
    pcntl \
    zip

WORKDIR /var/www/html

# Install dependencies
RUN apt-get update && apt-get install -y \
    build-essential \
    libpng-dev \
    libjpeg62-turbo-dev \
    libfreetype6-dev \
    locales \
    libzip-dev \
    zip \
    unzip \
    jpegoptim optipng pngquant gifsicle \
    vim \
    git \
    curl

RUN curl -sL https://deb.nodesource.com/setup_16.x | bash - \
    && apt-get install -y nodejs \
    && curl -sS https://dl.yarnpkg.com/debian/pubkey.gpg | apt-key add - \
    && echo "deb https://dl.yarnpkg.com/debian/ stable main" > /etc/apt/sources.list.d/yarn.list \
    && apt-get update \
    && apt-get install -y yarn

# Clean
RUN apt-get -y autoremove \
    && apt-get clean

ARG WWWUSER
ARG WWWGROUP

RUN groupadd --force -g $WWWGROUP theusergroup \
    && useradd -ms /bin/bash --no-user-group -g $WWWGROUP -u $WWWUSER theuser

USER $WWWUSER:$WWWGROUP

# Expose port 9000 and start php-fpm server
EXPOSE 9000

CMD ["php-fpm"]

Wow, this is frustrating...

I banged my head against the wall for an unreasonable amount of time only to accidentally figure out that the IDE Key was in fact being set.

Here's the kicker though.

If you look here, you'll see that the setting still says the xdebug.idekey value is not set.

If you look here though, you'll see that there's another area that shows that the IDE Key is set.

/shrug