(global distance field not available in shadow pass) Lighting Artifacts Appear When Using Distance To Nearest Surface With World Position Offset

When using "distance to nearest surface" node with WPO there are cases where the engine will shade the object incorrect. The attached project reproduces one of these scenarios.

It appears as though the distance field generated by the parent mesh (with the material applied) is interfering with the material's output.

1. Open attached project
2. Select the material instance named "Distance_Inst"
3. Change the scalar param "cutoff" value to 0.1

RESULT
The mesh turns dark and a large shadow is cast.

EXPECTED
The mesh stays lit and a shadow is cast that matches the visible geometry.