Terraform plugin cache is not working

I have been trying to enable the plugin cache with terraform on our 2020.5.0 install of octopus data centre but is does not seem to work. We are using various version of terraform 0.12.x and 0.13.5 using the custom path variable.

If I configure a terraform apply step with the Terraform plugin cache directory setting assigned to value like C:/Users/our-user/AppData/Roaming/terraform-plugin-cache the setting seems to get ignored and plugins are downloaded on every single deploy. We always see the plugin download in the logs
image
If the plugin cache is working (as tested locally) we see the plugin cache being populated and logs like the following
image
We have checked and the server user has access to that folder and it exists.
In addition we have tried to do a global terraform plugin cache config using a terraform.rc file as described in CLI Configuration - Terraform by HashiCorp. When we run terraform manually on the server we can see the config being applied and the cache being used, however when terraform is executed by octopus in a terraform apply step, the config file seems to be ignored and the plugin cache is not used.
Possibly a bug in octopus?

Tracked under bug Octopus does not use the configured Terraform plugin cache directory · Issue #6767 · OctopusDeploy/Issues · GitHub