NuGet packages are partially downloaded to the wrong directory

Question

First off, I have the following setup:

• MS Visual Studio 2019
• .Net 5 SDK
• dotnet --version: 5.0.405
• dotnet nuget --version: 5.11.1.5

This is regarding an Azure Functions project with the following project structure:

| MyProject.sln
| NuGet.Config
| Packages
| - Contains (at least should) all downloaded NuGet Packages
| Sources
| - Contains all subprojects

The NuGet.Config looks like this:

<?xml version="1.0" encoding="utf-8"?>
<configuration>
  <config>
    <add key="globalPackagesFolder" value="Packages" />
  </config>

  <packageSources>
    <clear />
    <add key="nuget.org" value="https://api.nuget.org/v3/index.json" protocolVersion="3" />
    <add key="Microsoft Visual Studio Offline Packages" value="C:\Program Files (x86)\Microsoft SDKs\NuGetPackages\" />
  </packageSources>

  <packageRestore>
    <add key="enabled" value="True" />
    <add key="automatic" value="True" />
  </packageRestore>

  <bindingRedirects>
    <add key="skip" value="False" />
  </bindingRedirects>

  <packageManagement>
    <add key="format" value="1" /> <!-- Using PackageReference -->
    <add key="disabled" value="False" />
  </packageManagement>
</configuration>

The default directory for storing the NuGet packages is %userprofile%\.nuget\packages. When I don't provide any NuGet.Config file, any NuGet package is placed there.

Using the above config ensures, that the packages are placed in the \Packages directory in project folder -> That's fine!

BUT: When I now open Visual Studio 2019 to things happen:

1. RESTORE: Downloads 171 Packages and places them where they should be placed
2. REBUILD PROJECT: Downloads another 137 Packages and places them in default nuget directory

The result of the second step is NOT what I am expecting.

• Am I doing something wrong within the NuGet.Config file?
• Is this kind of a bug?
• Or is that the expected behaviour and I am wrong with my expectations?