Add more details about terraform.tfvars

[annawinkler]

What

• Clarify what happens with terraform.tfvars in TFC and TFE on this page

Why

A customer noticed behavior that was undocumented, reported in this issue.

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[yermulnik]

A customer noticed behavior that was undocumented, reported in this issue.

@annawinkler @brandonc I do apologize for bumping this PR from 2022, but given the link to the mentioned issue isn't available to ordinary mortals like me, could you please share some details on how TF Cloud handles terraform.tfvars file nowadays: does it overwrite the file only when there's at least one TF Cloud workspace variable defined or does it not overwrite/ignore this file at all anymore but instead writes TF Cloud workspace vars into a *.auto.tfvars file with a special name (if yes, then since when and whether this was announced and communicated to community)?

The «Although Terraform Cloud uses variables from terraform.tfvars» is a bit ambiguous as doesn't provide definitive answer on how this file is handled by TF Cloud. And given the behavior had changed, it would've been expected this to be communicated to TF Cloud customers (especially to those who pay for the SaaS).

I used to know that TF Cloud overwrites terraform.tfvars unconditionally and hence in some edge cases we use *.auto.tfvars to bypass a need to create and manage TF Cloud workspace vars.
This was (in)directly confirmed by @apparentlymart at https://discuss.hashicorp.com/t/how-do-i-pass-var-file-on-teffaform-cloud/8505/6 back in 2021, though recently I've found this is not fully true anymore. So it looks like it is not a matter anymore and we can start using more straightforward terraform.tfvars. But there's no details and no guarantee this won't change over time with no explicit notice.

Thanks in advance.

[yermulnik]

@apparentlymart pointed out this comment #158 (comment) (thanks @apparentlymart for the pointer!) — this comment explains a lot on the matter and it would really great to have that added into TF documentation for tfvars so that people can see difference between regular TF (community edition), TFC and TFE. Thanks in advance.

[yermulnik]

Looks like the https://developer.hashicorp.com/terraform/cloud-docs/workspaces/variables#precedence is what explains the flow and details and is what turned out to misled me with overwrite (vs override: overwrite files vs override variables) 😢 I mistakenly was thinking that TF Cloud Workspace vars are written into terraform.tfvars file by overwriting this file, rather than to be merged into data set loaded from terraform.tfvars from the slug (the slug is what is being uploaded from the dir where user is running terraform, right?).