> Is this behaviour documented
yes, but ... if you pay attention about it, and in this area there are more than 2 functions.

> Should we audit all call sites of these two functions for similar ref-count trouble ?
Would prefer if we can rewrite it uniform, but this functions are public, so such changes would be backwards incompatible in external modules.

Not explainable to me are the troubles to reproduce it sometimes, resp. different behavour like executing of the same code without 'source' and within. So this function executes sometimes the scope with TranslatedPath, and sometimes the scope with NormalizedPath, but code is the same. Additionally this strange different execution time.
And if you have executed it in "source" once, that is no difference hereafter - then you can use it in console with different paths - all will go over scope with TranslatedPath.