What you described is exatly the reason. The issue here is simply the chick-egg dance of starting a beam VM:
Basically all code on the beam kinda wants the the logger to be running. Therefore it is started as soon as possible by the :kernel application, which is always the first application to start on an the beam (even directly bootstrapped by the vm iirc, see https://www.youtube.com/watch?v=_AqmxltiV9I). So at that point where :kernel is starting the logger it needs to setup the default handler and its formatting. Essentially no custom code has run yet. I’m not even sure config/runtime.exs is executed early enough in an release startup to configure the logger.
Therefore setting configuration with Mix.install doesn’t help. At that point the default handler is already running and configured from the app env. One would need to use the runtime APIs to adjust the formatter config, as there’s no code watching the app env for changes.
:logger.update_formatter_config(:default, %{metadata: [:payload, :application]})
(use :livebook_gl_handler instead of :default in livebook)
