Fixes based on testing

agent/configentry/merge_service_config.go

@@ -154,13 +154,6 @@ func MergeServiceConfig(defaults *structs.ServiceConfigResponse, service *struct
 	// remoteUpstreams contains synthetic Upstreams generated from central config (service-defaults.UpstreamConfigs).
 	remoteUpstreams := make(map[structs.PeeredServiceName]structs.Upstream)
 
-	var hasPeerUpstream bool
-	for _, us := range defaults.UpstreamConfigs {
-		if us.Upstream.Peer != "" {
-			hasPeerUpstream = true
-		}
-	}
-	legacyUpstreams := len(defaults.UpstreamIDConfigs) > 0 || !hasPeerUpstream
 	if len(defaults.UpstreamIDConfigs) > 0 {
 		// Handle legacy upstreams. This should be removed in Consul 1.16.
 		for _, us := range defaults.UpstreamIDConfigs {
@@ -216,10 +209,6 @@ func MergeServiceConfig(defaults *structs.ServiceConfigResponse, service *struct
 		}
 
 		uid := us.DestinationID()
-		if legacyUpstreams {
-			// Erase the peer field when doing a lookup so that configs are found.
-			uid.Peer = ""
-		}
 		localUpstreams[uid] = struct{}{}
 		remoteCfg, ok := remoteUpstreams[uid]
 		if !ok {

agent/configentry/resolve.go

@@ -203,6 +203,23 @@ func ComputeResolvedServiceConfig(
 		resolvedConfigs[wildcard] = wildcardUpstreamDefaults
 	}
 
+	// For Consul 1.14.x, service-defaults would apply to either local or peer services as long
+	// as the `name` matched. We introduce `legacyUpstreams` as a compatibility mode for:
+	//   1. old agents, that are using the deprecated UpstreamIDs api
+	//   2. Migrations to 1.15 that do not specify the "peer" field. The behavior should remain the same
+	//      until the config entries are updates.
+	//
+	// This should be remove in Consul 1.16
+	var hasPeerUpstream bool
+	for _, override := range upstreamOverrides {
+		if override.Peer != "" {
+			hclog.Default().Error("*** Found peer name in service-defaults", "name", override.Name)
+			hasPeerUpstream = true
+			break
+		}
+	}
+	legacyUpstreams := len(args.UpstreamIDs) > 0 || !hasPeerUpstream
+
 	for upstream := range seenUpstreams {
 		resolvedCfg := make(map[string]interface{})
 
@@ -254,8 +271,16 @@ func ComputeResolvedServiceConfig(
 		}
 
 		// Merge in Overrides for the upstream (step 5).
-		if upstreamOverrides[upstream] != nil {
-			upstreamOverrides[upstream].MergeInto(resolvedCfg)
+		if legacyUpstreams {
+			peerlessUpstream := upstream
+			peerlessUpstream.Peer = ""
+			if upstreamOverrides[peerlessUpstream] != nil {
+				upstreamOverrides[peerlessUpstream].MergeInto(resolvedCfg)
+			}
+		} else {
+			if upstreamOverrides[upstream] != nil {
+				upstreamOverrides[upstream].MergeInto(resolvedCfg)
+			}
 		}
 
 		if len(resolvedCfg) > 0 {

agent/structs/config_entry.go

@@ -10,8 +10,6 @@ import (
 
 	"github.com/miekg/dns"
 
-	"github.com/hashicorp/consul/api"
-
 	"github.com/hashicorp/go-multierror"
 	"github.com/mitchellh/hashstructure"
 	"github.com/mitchellh/mapstructure"