[Cloudflare] Tanstack Start overwrites / ignores Cloudflare Environments

{
  "$schema": "node_modules/wrangler/config-schema.json",
  "name": "test-app",
  "compatibility_date": "2025-11-21",
  "compatibility_flags": ["nodejs_compat"],
  "main": "@tanstack/react-start/server-entry",
  "workers_dev": false,
  "preview_urls": false,
  "services": [
    {
      "binding": "FOO_API",
      "service": "foo-api-backend" // prod service
    }
  ],
  "vars": {
    // prod domain
    "VITE_API_BASE_URL": "https://test-app.app"
  },
  "env": {
    // dev environment configuration
    "dev": {
      "name": "test-app-dev",
      "services": [
        {
          "binding": "FOO_API",
          "service": "foo-api-backend-dev" // dev service
        }
      ],
      "workers_dev": false,
      "preview_urls": false,
      "vars": {
        // dev domain
        "VITE_API_BASE_URL": "https://dev.test-app.app"
      }
    }
  }
}