Thanks, my feedback report # is FB11845080.

Update, back to square 1... After switching code signing setting to Run Locally and back to Developer, and cleaning, the xcodebuild test command succeeds from the Terminal with this target. Still fails on Xcode Cloud however, including after a clean environment.

Additional info: I discovered that this is not just an issue with Xcode cloud, I can reproduce by just trying to run the testing target from the command-line locally, with xcodebuild -scheme (XCTest-scheme-name) test I get the same error shown above, which does not occur when I run the Test action from the IDE. In this case it's looking for the test file in the Debug .app build in derived data - and the file is actually there. Any suggestions? Is this a code-signing issue?