isort doesn't respect config when it is inside subfolders

Context

I have a particular setup with a repo in which there are two folders containing python projects.
Those project each have their own pyproject.toml with their own config for isort.

If I run isort project1, everything works fine. Same with isort project2. However, if I do isort . from the root directory, isort doesn't seem to find the configuration and considers all firstparty imports to be thirdparty instead.

Reproduction

I have a reproduction repo for people to see what goes wrong.
It is available here: https://github.com/cedric-spinergie/isort-repro-2200

 > tree
.
├── django
│   ├── example.py
│   ├── pyproject.toml
│   └── setting.py
└── scripts
    ├── example2.py
    ├── pyproject.toml
    └── value.py

2 directories, 6 files

[tool.isort]
profile = "black"
line_length = 120
sections = "FUTURE,STDLIB,THIRDPARTY,FIRSTPARTY,LOCALFOLDER"

import sys

import pandas

from setting import test


def my_example(request):
    print(test)

test = "hello"

[tool.isort]
profile = "black"
line_length = 120
sections = "FUTURE,STDLIB,THIRDPARTY,FIRSTPARTY,LOCALFOLDER"

import sys

import pandas

from value import test2


def second_test(request):
    print(test2)

test2 = "hola"

The problem

As you can see, the main files django/example.py and scripts/example2.py each have 3 imports:

• 1 stdlib import (sys)
• 1 third party import (pandas)
• 1 first party import (setting or value)

By default, those imports are properly separated ; showing that isort properly understands the category they each belong to.

Now, if we do isort django or isort scripts, nothing changes, as expected.
But if we do isort ., we'll see the main files change to put setting / value into the third party exports category.

I expect isort django, isort scripts and isort . to behave the exact same way and always result in the exact same code.

Fun facts:

• isort django scripts will properly format django but mess up scripts.
• isort scripts django will properly format scripts but mess up django.

The option --resolve-all-configs does not change anything. It's as if it were entirely ignored or maybe I misunderstood its purpose.

Version

• isort 5.12.0
• Python 3.9.18

Reproduce the behavior in the linked isort-repro-2200 structure by running isort django, isort scripts, and isort ., with and without --resolve-all-configs. Trace the CLI's configuration discovery for nested pyproject.toml files; done means all three commands classify the local imports consistently.