Control library project references doesn't work in single-project apps

[dotMorten]

Describe the bug
If you create a class library with WinUI controls and reference them with a project reference, the app runs fine with WAP project, but crashes at startup when using a single-project app.

Microsoft.UI.Xaml.Markup.XamlParseException: 'XAML parsing failed.'
Inspecting the error doesn't lead to any more info in additional details, and since control works fine in a packaged project, I'm confident the XAML is ok.

Stack:

 	WinRT.Runtime.dll!WinRT.ExceptionHelpers.ThrowExceptionForHR(int hr)	Unknown
 	Microsoft.WinUI.dll!ABI.Microsoft.UI.Xaml.IApplicationStatics.Microsoft.UI.Xaml.IApplicationStatics.LoadComponent(object component, System.Uri resourceLocator, Microsoft.UI.Xaml.Controls.Primitives.ComponentResourceLocation componentResourceLocation)	Unknown
 	Microsoft.WinUI.dll!Microsoft.UI.Xaml.Application.LoadComponent(object component, System.Uri resourceLocator, Microsoft.UI.Xaml.Controls.Primitives.ComponentResourceLocation componentResourceLocation)	Unknown
>	SampleApp.dll!SampleApp.MainWindow.InitializeComponent() Line 39	C#
 	SampleApp.dll!SampleApp.MainWindow.MainWindow() Line 28	C#
 	SampleApp.dll!SampleApp.App.OnLaunched(Microsoft.UI.Xaml.LaunchActivatedEventArgs args) Line 45	C#
 	Microsoft.WinUI.dll!Microsoft.UI.Xaml.Application.Microsoft.UI.Xaml.IApplicationOverrides.OnLaunched(Microsoft.UI.Xaml.LaunchActivatedEventArgs args)	Unknown
 	Microsoft.WinUI.dll!ABI.Microsoft.UI.Xaml.IApplicationOverrides.Do_Abi_OnLaunched_0(System.IntPtr thisPtr, System.IntPtr args)	Unknown
 	[Native to Managed Transition]	
 	Microsoft.ui.xaml.dll!DirectUI::FrameworkApplicationGenerated::OnLaunchedProtected()	Unknown
 	Microsoft.ui.xaml.dll!DirectUI::FrameworkApplication::InvokeOnLaunchActivated()	Unknown
 	Microsoft.ui.xaml.dll!DirectUI::FrameworkApplication::StartOnCurrentThreadImpl()	Unknown
 	Microsoft.ui.xaml.dll!DirectUI::FrameworkApplicationGenerated::StartOnCurrentThread()	Unknown
 	Microsoft.ui.xaml.dll!DirectUI::WindowsXamlManager::XamlCore::Initialize()	Unknown
 	Microsoft.ui.xaml.dll!DirectUI::WindowsXamlManager::Initialize()	Unknown
 	Microsoft.ui.xaml.dll!ctl::ComObjectBase::CreateInstanceBase()	Unknown
 	Microsoft.ui.xaml.dll!ctl::ComObject<DirectUI::WindowsXamlManager>::CreateInstance<DirectUI::WindowsXamlManager>()	Unknown
 	Microsoft.ui.xaml.dll!ctl::make<class DirectUI::WindowsXamlManager>(class ctl::Internal::ComPtrRef<class ctl::ComPtr<class DirectUI::WindowsXamlManager> >)	Unknown
 	Microsoft.ui.xaml.dll!DirectUI::WindowsXamlManagerFactory::InitializeForCurrentThreadImpl()	Unknown
 	Microsoft.ui.xaml.dll!DirectUI::WindowsXamlManagerFactory::InitializeForCurrentThread()	Unknown
 	Microsoft.ui.xaml.dll!DirectUI::FrameworkApplicationFactory::Start()	Unknown

Steps to reproduce the bug

1. Unzip reproducer: MyControlsLibrary.zip
2. Open solution, and run "Sample app"
3. Observe exception.

The same app in a WAP project does not crash but renders the custom control just fine. Also if you package the library into a nuget package and reference that, it does work fine. So it's an issue caused by a mix of project references and single-project builds.

Expected behavior
App runs same way as with WAP

Screenshots

Version Info
Win11

NuGet package version:
1.0.0-preview1

Additional context

This makes it impossible to use a unit test framework to run tests against control libraries.

[gabbybilka]

@marb2000 as FYI

[StephenLPeters]

@evelynwu-msft Thoughts?

[marb2000]

I think this is a known issue to be fixed, right, @codendone and @MikeHillberg?

[evelynwu-msft]

@dotMorten I updated your repro project to WinAppSDK 1.3 (since 1.0 Preview 1 is pretty old and there have been a lot of changes since then) and the app ran without issue. Feel free to reopen this if the crash is still occurring for you.