terra::distance between point and polygon returns degrees instead of km

I have a simple polygon and a single point, both having the same crs with lonlat:

library(terra)

pol <- vect("POLYGON ((1 1, 3 1, 3 2, 4 3, 3 4, 2 4, 1 1))",crs="EPSG:4326")
pt <- vect(cbind(3.5,5),crs="EPSG:4326")

I want to calculate the distance between pt and the nearest point of pol which is point 5. I used

terra::distance(pt,pol,unit="km")

but the results are in degrees instead of kilometers:

[1,] 1.118034

Calculating the length of the red line the long way, it turns out to be 123.7 km

perim(as.lines(vect(list(pt,as.points(pol)[5,]))))/1000

Although both x and y are SpatVectors with the same crs, distance returns degrees. Is this a bug or did I miss something?

I use version 1.7-78 of terra.

According to terra documentation The distance is always expressed in meter, except when the coordinate reference system is longitude/latitude AND one of the SpatVector(s) consists of lines or polygons. In that case the distance is in degrees, and thus not very useful (this will be fixed soon). Otherwise, results are more precise, sometimes much more precise, when using longitude/latitude rather than a planar coordinate reference system, as these distort distance

Using sf instead gives the right result

library(terra)

pol <- vect("POLYGON ((1 1, 3 1, 3 2, 4 3, 3 4, 2 4, 1 1))",crs="EPSG:4326")
pt <- vect(cbind(3.5,5),crs="EPSG:4326")

library(sf)

pol <- st_as_sf(pol)
pt <- st_as_sf(pt)

sf::st_distance(pol, pt)

Units: [m]
       [,1]
[1,] 124243

The difference with your value 123.7 can be explained by the way sf computes distance when in degrees (it uses spherical geometry)