Replying here since itch's reply chain thing is getting kinda crazy... hopefully you see the notif.
Downloaded Unity 2021 and made a URP project and something is definitely up here.
What I find most interesting is this:
This above screenshot is regular text, and...
This is UI text!
I'm going to assume this is the exact same issue you're having... for whatever reason, STM is grabbing the text as a mask texture instead of the active quad. You can see the outline on the first pic's quad is totally wrong, it's normally supposed to be an outline of the quad like you would expect. On regular text, it's still rendering correctly anyway, despite this. But on UI text, the incorrect mask is being applied! The little bit of the quad that overlaps with the incorrect mask is rendering. The verts are using the right UVs, but the wrong texture... and the second material used for quads appears to have the correct texture, despite this. I'm having a bit of trouble with 2021's material inspector, though.
I'm currently digging through my own material generation and shader code to figure out what could be causing this in Unity 2021/URP, so... hopefully something will click, soon
Yeah, as I shift Materials around, it seems to always use the mask of the first material on the mesh renderer...
Yeah, for now it might just be a Unity bug? Everything seems to be in-line, materials-wise. The mesh renderer has 3 submeshes, 3 materials, each materials has the exact data it should have... but both the meshrenderer and canvasrenderer are using the wrong non-main texture data on submeshes besides the first one. If I flip the order of the Quad and Text materials on the mesh renderer:
...We get the correct outline for the quad! (Ignoring everything else being broken)
I'll keep thinking about if there's anything I'm missing, but nothing is striking me just yet