diff --git a/src/cargo/core/workspace.rs b/src/cargo/core/workspace.rs
index a81c6b9304e..55db0e913a8 100644
--- a/src/cargo/core/workspace.rs
+++ b/src/cargo/core/workspace.rs
@@ -1800,7 +1800,10 @@ impl<'gctx> Packages<'gctx> {
         match self.packages.entry(key.to_path_buf()) {
             Entry::Occupied(e) => Ok(e.into_mut()),
             Entry::Vacant(v) => {
-                let source_id = SourceId::for_path(key)?;
+                let source_id = match crate::util::toml::is_embedded(manifest_path) {
+                    true => SourceId::for_path(manifest_path)?,
+                    false => SourceId::for_path(key)?,
+                };
                 let manifest = read_manifest(manifest_path, source_id, self.gctx)?;
                 Ok(v.insert(match manifest {
                     EitherManifest::Real(manifest) => {