Why are Nested References processed in the iTwin Synchronizer Portal even when Nesting is off?

Hi all,

I am noticing that DGNs I am synchronizing in the iTwin Synchronizer portal for iModels are processing all Nested Referencing although all our files do not have Nesting enabled for all their references.

Since we are synchronizing container files that have live design models referenced in, nested references including IFCs and DWGs get included in processing as well as the mass of all files referenced in downstream, meaning 500+ files are included, eg.

Is this WAD? If so, this may cause issues for those of us wanting to use iTwin Services for progress reviews and team sharing.

Regards,

Mark