Why a static library cannot be linked to a framework but can be linked to an application?

Background

I have the following structure:

1. CoreDomain target of type library.static.
2. MyApplication target of type application.
3. CoreData target of type framework.

When I link the static library to my MyApplication target with the following code:

dependencies:
      # Internal Dependencies
      - target: CoreDomain

It works fine and I see libCoreDomain.a in the Frameworks, Libraries and Embedded content section.

Problem

However, doing the same as above with CoreData framework, the libCoreDomain.a is not linked.

IMPORTANT

I can add the libCoreDomain.a manually to my framework, but not through xcodegen

Start by tracing how XcodeGen handles target dependencies for framework targets versus application targets, using the shown CoreDomain, MyApplication, and CoreData configuration as the reproduction. Compare the generated project with the manually linked setup; done means the generated CoreData framework links libCoreDomain.a through the target dependency configuration.