bundle: false only includes entrypoint modules in output

Minimal reproduction: https://github.com/sentience/tsup-bundle-false-issue

export default defineConfig({
  bundle: false,
  format: ["esm"],
  dts: true,
  splitting: true,
  entry: {
    index: "src/index.ts",
  },
})

The bundle option is only documented as "Disable bundling" in the API docs, but what I (perhaps incorrectly) expected it to do was to output all modules referenced by my entry module(s), but not bundle them into the entry modules.

So if I had:

src/index.ts

export { foo } from './foo.js'

src/foo.ts

export function foo() {
  console.log("This is a function that should make it into the output of this package.")
}

I would expect tsup to output two JavaScript files:

dist/index.mjs

import { foo } from "./foo.js"
export {
  foo
}

dist/foo.mjs

export function foo() {
  console.log("This is a function that should make it into the output of this package.")
}

Instead, tsup only outputs the first of those two files. The implementation of foo is left out of the build output entirely.

Is this really what bundle: false is supposed to do? If so, I don't understand what the use case for this option is.

My use case is to publish an ESM package with no bundling in order to maximise its tree-shakeability, assuming the consuming project will use a bundler to tree-shake dependencies and produce browser-ready bundles.