Settings from client and .luarc.json not getting merged

How are you using the lua-language-server?

NeoVim

Which OS are you using?

Linux

What is the issue affecting?

Other

Expected Behaviour

Global settings from the client and local settings from the .luarc.json file should get merged. In my case I have the following .luarc.json:

{
	"$schema": "https://raw.githubusercontent.com/LuaLS/vscode-lua/master/setting/schema.json",
  	"workspace.ignoreDir": ["test/xdg"]
}

There is no workspace.ignoreDir setting in my client config.

Actual Behaviour

The settings from .luarc.json are not applied. I have to add the ignoreDir setting to my client configuration for it to do something.

Reproduction steps

N/A

Additional Notes

I am testing a Neovim plugin (HiPhish/rainbow-delimiters.nvim), and the test setup requires me to place a symlink to the plugin root directory inside on of its sub-directories (rainbow-delimiters). When the language server starts scanning the plugin directory it ends up running in circles. Adding this directory to the ingoreDir list stops the infinite loop and the language server can scan all files normally.

I cannot place all my settings inside the local .luarc.json because the settings for Neovim configuration and plugin development cannot be known ahead of time, they must be generated. I can place the workspace.ignoreDir setting in my own client configuration, but this won't help people who want to contribute to my plugin.

What I need is for the language server to merge both configurations into one. The order should be from least to most significant:

1. client configuration
2. local configuration
3. custom configuration file (maybe?)

Log File

file_home_hiphish_.local_share_nvim_site_pack_my-plugins_start_rainbow-delimiters.nvim.log

service.log

Start by tracing how the language server loads and combines client settings with .luarc.json, focusing on workspace.ignoreDir. Use the attached logs to confirm which configuration is applied and where merging stops. Done means client and local settings follow the requested precedence and a regression test covers workspace.ignoreDir from both sources.