Offline package drop requiring a password for sensitive variables, even when not included in project

[LewisJohnsonOctopus]

Severity

No response

Version

2026.4.1480

Latest Version

None

What happened?

When deploying a project to an offline package drop target, you are met with the error message stating
This project contains sensitive-variables, but your offline-drop target does not have an encryption password set. Please set the encryption password on your offline-drop target and try this deployment again.
This happens even without the project containing any sensitive variables

Reproduction

1. Have an offline package drop target with no Sensitive-variables Encryption Password set
2. Attempt to deploy a release containing no sensitive variables

Error and Stacktrace

More Information

No response

Workaround

Create a password for the offline package drop target as a temporary workaround. This allows the deployment to continue.