mermaid: forward options from YAML metadata to code cell initialization directives

Within a Quarto .qmd file the directive that works here in GitHub (see below) and in the Mermaid interactive editor, is ignored when rendering a .qmd file to HTML (from within RStudio under Windows 10). This affects the whole of my website when rebuilt, but was working some/several weeks ago. Is there any quick workaround to get the directive obeyed? e.g., downgrading Quarto to some earlier version?

%%{init: {"htmlLabels": true} }%%

flowchart LR
  A(<i>model formula</i>) --> B[model fit\nfunction] --> C(model fit\nobject) --> D1['diagnostics' plots]
  AA(<i>observations</i>) --> B
  C --> D2[query methods]

The same code as an embed in this message renders correctly.

%%{init: {"htmlLabels": true} }%%

flowchart LR
  A(<i>model formula</i>) --> B[model fit\nfunction] --> C(model fit\nobject) --> D1['diagnostics' plots]
  AA(<i>observations</i>) --> B
  C --> D2[query methods]