Here's a modified version of the default unlit vertex shader that shows how to break UnityObjectToClipPos into two steps, with a layover in camera view space in between.
v2f vert (appdata v)
// Ordinarily, we'd go all the way from object space to clip space in one operation:
// o.vertex = UnityObjectToClipPos(v.vertex);
// But ...
vec2 ofs = horizontal ? vec2(offset.x, 0) : vec2(0, offset.y);
Simple ternary expressions like this can be compiled to a conditional move instruction, with no branching. So your second version eliminates all overhead that might be needed to support the branch.
Ok, this problem apparently occurs because at some point I enabled "GPU Instancing" under the materials "Advanced" options. Material is using the shader "URP/SimpleLit" with its Albedo set to the sprite texture. So if anyone else runs into this kind of lighting problem in their projects "GPU Instancing" might be why ...