Use of TF_TOKEN_ Environment Variable for External Module Registry Access

[alfespa17]

Discussed in https://github.com/orgs/AzBuilder/discussions/626

^{Originally posted by ben-balk-oc December 6, 2023}
According to Terraform CLI documentation, version v1.2.0 and later support use of environment variable credentials to make requests to specific hostnames (https://developer.hashicorp.com/terraform/cli/config/config-file#environment-variable-credentials). We're hoping to migrate all of our workspaces from Terraform Cloud into Terrakube and it would be significantly easier if we had a way to pull modules from our current Terraform Cloud module registry while we convert to either a Terrakube registry or update our modules to use Github repo sources.

Should this work by simply setting an environment variable named TF_TOKEN_app_terraform_io in the workspace(s)? I can't seem to get that to work using a VCS workflow workspace regardless of which version I specify.
Example error from terraform plan:

Failed to retrieve available versions for module "core" (core.tf:1) from
app.terraform.io: error looking up module versions: 401 Unauthorized.

I have used a modified template to print the environment variables in my Terrakube shell environment and can see the appropriate variable for TF_TOKEN_app_terraform_io.