3.21.0-rc1 breaks transitive out-of-dir linking

The following example works in 3.20.5 and fails in 3.21.0-rc1:

$ cat ../CMakeLists.txt
cmake_minimum_required(VERSION 3.20)
project(LinkInSubdir LANGUAGES "CXX")

add_library(foo STATIC foo.cpp)
add_subdirectory(sub)

add_executable(baz main.cpp)
target_link_libraries(baz PRIVATE foo)

$ cat ../sub/CMakeLists.txt
add_library(sub::target INTERFACE IMPORTED)
target_link_libraries(foo PRIVATE sub::target)

$ cmake ..
...
CMake Error at CMakeLists.txt:7 (add_executable):
  Target "baz" links to target "sub::target" but the target was not found.
  Perhaps a find_package() call is missing for an IMPORTED target, or an
  ALIAS target is missing?