Reproduction steps:
1. Open the attached “IN-54284 Terrain Trees NavMesh.zip“ project
2. Open the scene “SampleScene”
3. Select the "Terrain" GameObject in the Hierarchy
4. Press "Bake" in the Inspector at the bottom of the NavMeshSurface component
5. Wait for the baking to complete
6. In the AI Navigation overlay of the Scene view, make sure “Surfaces” > "Show NavMesh" is enabled
7. Make sure Gizmos are enabled at the top-right corner of the Scene view
8. Observe the generated NavMesh in the Scene view

Expected result: Holes are cut into the NavMesh where the Terrain Trees are
Actual result: The Terrain Trees are not taken into account for the baked NavMesh

Reproducible with: 1.0.0-exp.4 (2021.3.30f1), 1.1.4 (2022.3.10f1, 2023.1.13f1), 2.0.0-pre.3 (2023.2.0b9, 2023.3.0a5)

Reproduced on: Windows 11 Pro (22H2)
Not reproduced on: No other environment tested

Notes:
- Could not test in Player (NavMesh is not displayed)
- Reproducible in a new project
- Cylinders have been used as the Terrain Trees in the attached project
- When baking the NavMesh via the Navigation window (“Navigation (Obsolete)” in streams newer than 2021.3) the expected result is produced