Check if ref'd resource is selected before favoring state (#10108)

* Add test case

* Check if ref'd resource is selected before favoring state

* Add changie

.changes/unreleased/Fixes-20240508-151127.yaml

@@ -0,0 +1,7 @@
+kind: Fixes
+body: 'Restore previous behavior for --favor-state: only favor defer_relation if not
+  selected in current command"'
+time: 2024-05-08T15:11:27.510912+02:00
+custom:
+  Author: jtcohen6
+  Issue: "10107"

core/dbt/context/providers.py

@@ -554,8 +554,11 @@ def create_relation(self, target_model: ManifestNode) -> RelationProxy:
             and target_model.defer_relation
             and self.config.args.defer
             and (
-                # User has explicitly opted to prefer defer_relation
-                self.config.args.favor_state
+                # User has explicitly opted to prefer defer_relation for unselected resources
+                (
+                    self.config.args.favor_state
+                    and target_model.unique_id not in selected_resources.SELECTED_RESOURCES
+                )
                 # Or, this node's relation does not exist in the expected target location (cache lookup)
                 or not get_adapter(self.config).get_relation(
                     target_model.database, target_model.schema, target_model.identifier

tests/functional/defer_state/test_defer_state.py

@@ -230,6 +230,26 @@ def test_run_defer_iff_not_exists(self, project, unique_schema, other_schema):
         assert len(results) == 2
         assert other_schema not in results[0].node.compiled_code
 
+        # again with --favor-state, but this time select both the seed and the view
+        # because the seed is also selected, the view should select from the seed in our schema ('other_schema')
+        results = run_dbt(
+            [
+                "build",
+                "--state",
+                "state",
+                "--select",
+                "seed view_model",
+                "--resource-type",
+                "seed model",
+                "--defer",
+                "--favor-state",
+                "--target",
+                "otherschema",
+            ]
+        )
+        assert len(results) == 2
+        assert other_schema in results[1].node.compiled_code
+
 
 class TestDeferStateDeletedUpstream(BaseDeferState):
     def test_run_defer_deleted_upstream(self, project, unique_schema, other_schema):