Sprite Renderer not rendering duplicated GameObject grey when using MaterialPropertyBlock

Reproduction steps:
1. Open the “TempProject.zip”
2. Open the Frame Debugger window (Window > Analysis > Frame Debugger)
3. Enter Play mode and Enable the Frame Debugger
4. Observe the Game window of the 3rd frame and Draw Dynamic event in the Frame Debugger window (Camera.Render > Drawing > Render.TransparentGeometry > RenderForward.RenderLoopJob > Draw Dynamic)

Expected result: Both trees are rendered gray and there’s nothing of note in the Frame Debugger window
Actual result: Only one of the trees is rendered gray and “Why this draw call can’t be batched with the previous one
Objects have different MaterialPropertyBlock set.” message is shown in the Frame Debugger window

Reproducible with: 2021.3.35f1, 2022.3.20f1, 2023.2.12f1, 2023.3.0b9

Reproduced on: macOS Sonoma 14.3 (Intel), Windows 11 (22H2), macOS 13.2.1 (M2) (by user)

Notes:

• Also reproducible in Player
• If the issue does not reproduce restart the Editor