How does PIO figure out includes for library dependencies?

I am including latest master of USBHost_t36 via:

lib_deps =

It fails to include <SdFat.h> somehow. I checked the verbose output and it appears that it’s not explicitely including the SdFat library that ships with framework-arduinoteensy (i.e. .platformio\packages\framework-arduinoteensy\libraries\SdFat).

arm-none-eabi-g++ -o .pio\build\teensy40\libafb\USBHost_t36\serial.cpp.o -c -std=gnu++17 -fno-exceptions -felide-constructors -fno-rtti -Wno-error=narrowing -fpermissive -fno-threadsafe-statics -fno-exceptions -fno-rtti -Wall -ffunction-sections -fdata-sections -mthumb -mcpu=cortex-m7 -nostdlib -fsingle-precision-constant -mfloat-abi=hard -mfpu=fpv5-d16 -O2 -DPLATFORMIO=60105 -D__IMXRT1062__ -DARDUINO_TEENSY40 -DUSB_SERIAL -DARDUINO=10805 -DTEENSYDUINO=157 -DCORE_TEENSY -DF_CPU=600000000 -DLAYOUT_US_ENGLISH -I.pio\libdeps\teensy40\USBHost_t36 -I.pio\libdeps\teensy40\USBHost_t36\utility -IC:\Users\xy\.platformio\packages\framework-arduinoteensy\cores\teensy4 .pio\libdeps\teensy40\USBHost_t36\serial.cpp
In file included from .pio\libdeps\teensy40\USBHost_t36\MassStorageDriver.cpp:28:0:
.pio\libdeps\teensy40\USBHost_t36\USBHost_t36.h:2389:19: fatal error: SdFat.h: No such file or directory

Important to note that I managed to compile it before but after including another library (lvgl & lvgl glue) in my project it somehow gets confused.

Here is the rest of my .platformio:

platform = teensy
board = teensy40
framework = arduino
build_unflags = -std=gnu++14
build_flags = -std=gnu++17 -fno-exceptions -fno-rtti
lib_deps =
    adafruit/Adafruit ST7735 and ST7789 Library@^1.9.3
    adafruit/Adafruit LittlevGL Glue Library@^2.1.0

Retry with lib_ldf_mode = deep+ added in the platformio.ini? Library dependency finding is explained in the docs.