RCA
A fix was released to ensure .tfvars files are properly loaded during the init phase with for-each feature, that was introduced in the OpenTofu 1.9.0 version.
Technical details:
.tfvars on init, validate,and fmt phases for runs with the flag -var-file..tfvars file using the -var and -var-file options was introduced in OpenTofu 1.8.0, and exception handling was missed for any versions less than 1.8.0..tfvars files in the VCS-driven workspaces with OpenTofu < 1.8.0 and all Terraform versions supported by Scalr were affected.