Hair is not rendered with water physics when overlapping with another GameObject

Steps to reproduce:
1. Open the “HairProblem.zip” project
2. Open the “OutdoorsScene”
3. Open the Game View
4. Observe the Hair

Expected result: Hair is rendered with water physics
Actual result: Hair that is overlapping with the “Sphere” GameObject is not rendered with water physics

Reproducible in: 6000.0.52f1, 6000.1.11f1, 6000.2.0b9, 6000.3.0a1
Couldn’t test in: 2022.1.0a1 (Hair Package errors), 2022.3.64f1 (Composition Mode setting is not available)

Reproducible on: Windows 11
Not reproducible on: No other environment tested