Backend: Variable expansion of inherited variables in child pipeline

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Summary

Variables created in a parent, but inherited by a child pipeline are not properly expanded.

Steps to reproduce

1. Create a group level CI/CD variable named TARGET_ENV with the value set to "DEV"
2. Create an Environment called "DEV"
3. Add .gitlab-ci.yml:

stages:
  - output
  - trigger_child

variables:
  PARENT_VARIABLE: "test-$TARGET_ENV-variable"

Output Job:
  stage: output
  environment: 'DEV'
  script:
    - echo "$PARENT_VARIABLE"
    - ls


Child Trigger Job:
  stage: trigger_child
  trigger:
    include: 'child-pipeline.yml'

4. Create child-pipeline.yml

stages:
  - child-job

variables:
  CHILD_VARIABLE_TEST: "Test-$PARENT_VARIABLE"
  DIRECT_VARIABLE_TEST: "Direct-$TARGET_ENV-variable"
  LOCAL_VARIABLE_TEST: "test"

Child Job:
  stage: child-job
  environment: 'DEV'
  script:
    - echo "$CHILD_VARIABLE_TEST"
    - echo "$DIRECT_VARIABLE_TEST"
    - echo "$TARGET_ENV"
    - echo "$LOCAL_VARIABLE_TEST"

5. Run pipeline, observe output from the child pipeline, noting that $CHILD_VARIABLE_TEST is does not contain the value of $PARENT_VARIABLE

[...]
$ echo "$CHILD_VARIABLE_TEST"
Test-test--variable
$ echo "$DIRECT_VARIABLE_TEST"
Direct-DEV-variable
$ echo "$TARGET_ENV"
DEV
$ echo "$LOCAL_VARIABLE_TEST"
test
[...]

Example Project

https://gitlab.com/tmarsh1/var-set-in-parent-not-expanded-in-child-pipeline

What is the current bug behavior?

$CHILD_VARIABLE_TEST returns Test-test--variable

What is the expected correct behavior?

$CHILD_VARIABLE_TEST returns Test-test-DEV-variable

Relevant logs and/or screenshots

Output of checks

This bug happens on GitLab.com

Results of GitLab environment info

Expand for output related to GitLab environment info

(For installations with omnibus-gitlab package run and paste the output of: \\\`sudo gitlab-rake gitlab:env:info\\\`) (For installations from source run and paste the output of: \\\`sudo -u git -H bundle exec rake gitlab:env:info RAILS_ENV=production\\\`)

Results of GitLab application Check

Expand for output related to the GitLab application check

(For installations with omnibus-gitlab package run and paste the output of: \`sudo gitlab-rake gitlab:check SANITIZE=true\`) (For installations from source run and paste the output of: \`sudo -u git -H bundle exec rake gitlab:check RAILS_ENV=production SANITIZE=true\`) (we will only investigate if the tests are passing)

Possible fixes