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Path in values ref is not working #24981

@Woitekku

Description

@Woitekku

Checklist:

  • I've searched in the docs and FAQ for my answer: https://bit.ly/argocd-faq.
  • I've included steps to reproduce the bug.
  • I've pasted the output of argocd version.

Describe the bug

Path in values ref is not working

Failed to load target state: failed to generate manifest for source 1 of 2: rpc error: code = Unknown desc = failed to execute helm template command: failed to get command args to log: `helm template . --name-template api-dev --namespace dev --kube-version 1.33 --values <path to cached source>/kubeform/charts/base-chart/values.yaml --values <path to cached source>/api/values/dev.yaml <api versions removed> --include-crds` failed exit status 1: Error: open <path to cached source>/api/values/dev.yaml: no such file or directory

To Reproduce

Apply this:

apiVersion: argoproj.io/v1alpha1
kind: ApplicationSet
metadata:
  name: example
  namespace: argocd
spec:
  generators:
    - list:
        elements:
          - name: app1
            env: dev
            namespace: dev
          - name: app2
            env: dev
            namespace: dev
          - name: app3
            env: dev
            namespace: dev
  template:
    metadata:
      name: '{{name}}-{{env}}'
    spec:
      project: apps
      sources:
        - repoURL: https://github.com/example-org/example-repo.git
          targetRevision: HEAD
          path: kubeform/charts/base-chart
          helm:
            valueFiles:
              - values.yaml
              - $values/{{name}}/values/{{env}}.yaml
        - repoURL: https://github.com/example-org/example-repo.git
          targetRevision: HEAD
          ref: values
          path: kubeform/apps
      destination:
        server: https://kubernetes.default.svc
        namespace: '{{namespace}}'
      syncPolicy:
        automated:
          prune: true
          selfHeal: true
        syncOptions:
          - CreateNamespace=true

Expected behavior

Properly address values.
Without path in 2nd source repo and with following valueFiles in 1sr source repo it's working:

 sources:
        - repoURL: https://github.com/example-org/example-repo.git
          targetRevision: HEAD
          path: kubeform/charts/base-chart
          helm:
            valueFiles:
              - values.yaml
              - $values/kubeform/apps/{{name}}/values/{{env}}.yaml
        - repoURL: https://github.com/example-org/example-repo.git
          targetRevision: HEAD
          ref: values

Version

argocd: v3.1.8+becb020
  BuildDate: 2025-09-30T17:00:33Z
  GitCommit: becb020064fe9be5381bf6e5818ff8587ca8f377
  GitTreeState: clean
  GoVersion: go1.25.1
  Compiler: gc
  Platform: darwin/arm64
argocd-server: v3.1.8+becb020
  BuildDate: 2025-09-30T15:33:46Z
  GitCommit: becb020064fe9be5381bf6e5818ff8587ca8f377
  GitTreeState: clean
  GoVersion: go1.24.6
  Compiler: gc
  Platform: linux/amd64
  Kustomize Version: v5.7.0 2025-06-28T07:00:07Z
  Helm Version: v3.18.4+gd80839c
  Kubectl Version: v0.33.1
  Jsonnet Version: v0.21.0

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