Ansible 2.8+ synchronize action plugin does not work with custom ssh_executable

Question

I recently upgraded ansible from version 2.3 to 2.8 and the synchronize module started throwing the following error:

fatal: [my.host.com]: FAILED! => {
    "msg": "Could not find the shell plugin required (my_custom_ssh_executable)."
}

I have been using a custom ssh_executable in ansible.cfg which has been working fine in ansible 2.3 with synchronize module. In 2.8 version, only synchronize module doesn't work, other modules are working fine with the same custom ssh_executable.

I did some debugging, and it looks like the error happens within the synchronize action plugin and not the module itself.

I also tried latest ansible version 2.9.4 and the same error happens.