Error with multiline variable and ${VARIABLE} notation: "Expected a variable name after this $"

[9999years]

Given a file hook.sh:

export shellHook='"${DIRENV_IN_ENVRC}"
'

Then, replay . hook.sh errors:

$ replay . hook.sh
- (line 1): Expected a variable name after this $.
set --global --export shellHook \"\\$\{DIRENV_IN_ENVRC\}\"\
                                    ^
from sourcing file -
        called on line 25 of file ~/.config/fish/fundle/jorgebucaran/replay.fish/functions/replay.fish
in function 'replay' with arguments '. hook.sh'
source: Error while reading file '<stdin>'

I'm not sure what exactly causes this bug, but it seems to be the combination of a multiline variable and the braced ${VARIABLE} notation.

I assume part of this bug is from the complexity of escaping in replay.fish: first the variable contents are passed to string escape, then piped through string replace --all -- \$ \\\$, then through string replace --all -- \\n \n.

After inserting some debugging statements, it looks like this is what's sourced in fish:

set --global --export shellHook \"\\$\{DIRENV_IN_ENVRC\}\"\

And we can confirm:

$ string escape -- '"${DIRENV_IN_ENVRC}"\\n' | string replace --all -- \$ \\\$ | string replace --all -- \\n \n
\"\\$\{DIRENV_IN_ENVRC\}\"\

I'm not actually sure what the string replace --all \$ \\\$ bit is for; maybe it's relevant for other lines?