The 'test runner' correctly finds the tests in all of the subprojects, and shows them grouped by subproject.
The issue is that when run, the working directly is set to the top-level workspaceFolder, not the subject folder. When running the tests with gradle, the working directory is the top of the subproject.
I would try to create a test config, but I would need a test config for each project in order to set workingDirectory correctly - but then I would also need to somehow configure which test config to use for each subproject.
It seems that when subprojects are being used, something like:
{
workingFolder = "${subprojectFolder}"
}
is necessary.