It seems like the issue goes away if I quit out of Fusion and reopen. I’m not totally sure though because I’ve tried so many things to resolve it. Just as a test I tried in my standalone V5 and it worked without issue so I think there’s something else at play.
Possibly related, if I generate a mesh with a holdout then clear that mesh and drag it above the holdout and regenerate the mesh, it acts like it’s still under the holdout. This happens in the other order as well. So it looks like there is a cache issue for the mesh generation. As a work around I can duplicate said layer and then generate the mesh and it works as expected…
On another topic I was wondering why overlapping shapes on the same layer using ‘add x spline to layer’ subtract from each other.