I am pretty confident that there is no layout involved when the diagram is first loaded - as I said, I put a breakpoint in Diagram.layoutDiagram and it does not get triggered but there might be a better way to know for sure.
However, I found this really old post and the solution there seems to have fixed the problem… So I set the Link.adjusting to go.LinkAdjusting.Stretch and it now behaves - I am not sure if this is intended since the post was from 11 years ago and it says it was fixed