Hi @kenmyers-8451,

Glad you tracked this down. This is a common gotcha with Databricks Asset Bundles (DABs) when splitting configuration across multiple files: if the file containing your target definition (with mode: development) is not listed in the include mapping of your root databricks.yml, the bundle CLI simply never sees it.

For anyone else who runs into this, here is what to check:

HOW INCLUDE WORKS

Your root databricks.yml must explicitly reference any additional YAML files using the include mapping. For example:

# databricks.yml
bundle:
name: my-bundle

include:
- "targets.yml"
- "resources/*.yml"

Without that include entry, settings in a separate targets file (mode, variables, workspace overrides, etc.) will be silently ignored. There is no error or warning, which makes this easy to miss.

WHAT MODE: DEVELOPMENT DOES

Once the target file is properly included, setting mode: development on a target activates these behaviors automatically:

1. Prepends resource names (jobs, pipelines, etc.) with [dev <your_short_name>]
2. Tags jobs and pipelines with a "dev" tag
3. Pauses all schedules and triggers
4. Enables concurrent job runs
5. Marks any Lakeflow Spark Declarative Pipelines as development: true
6. Disables the deployment lock for faster iteration

You can override any of these individually. For example, to keep a schedule active in dev:

targets:
Development:
  mode: development
  default: true

resources:
jobs:
  my_job:
    schedule:
      pause_status: UNPAUSED

You can also customize the prefix and other behaviors using the presets mapping under your target:

targets:
Development:
  mode: development
  presets:
    name_prefix: "custom_prefix_"
    tags:
      custom_tag: "value"

Full details on deployment modes and presets:
https://docs.databricks.com/en/dev-tools/bundles/deployment-modes.html

DEBUGGING TIP

If you ever suspect your configuration is not being picked up, you can run:

databricks bundle validate -t Development

This will show you the fully resolved bundle configuration, including which files were included and the final merged target settings. If your target or its mode does not appear in the output, that confirms the file is not being included.

Docs on the include mapping:
https://docs.databricks.com/en/dev-tools/bundles/settings.html

* This reply used an agent system I built to research and draft this response based on the wide set of documentation I have available and previous memory. I personally review the draft for any obvious issues and for monitoring system reliability and update it when I detect any drift, but there is still a small chance that something is inaccurate, especially if you are experimenting with brand new features.

If this answer resolves your question, could you mark it as "Accept as Solution"? That helps other users quickly find the correct fix.