misinterpretation of shell $'...' escape form

[Poor Yorick]

Given the following Makefile,

<code>
define newline


endef

define cmd1
        thing1
        thing2
endef

help:
        echo '$(subst $(newline),'$$'\n'',$(cmd1))'
.PHONY: help
</code>


, on an Ubuntu 22.04 system, GNU Make 4.3, Bash 5.1.16(1), and the 
Makefile below, "make help" produces the following


<verbatim>
echo '  thing1'$\n''    thing2'
    thing1$
    thing2
</verbatim>

I believe the output should instead have been:

<verbatim>
echo '  thing1'$\n''    thing2'
    thing1
    thing2
</verbatim>


And indeed, an an Arch Linux system with the same version of Make and 
Bash, it
does.

Furthermore, replacing "$\n" with "$\x0A" produced the following on the
"broken" Ubuntu system:

<verbatim>
echo '  thing1'$\n''    thing2'
    thing1$\x0A    thing2
</verbatim>

I'm at a loss to explain why the output is different on these two 
systems, and
why that extra "$" character appears in the output on the first system, 
which
seems even more wrong than the first example.

Can anyone reproduce this, and has anyone got any insights about what 
the issue
might be?

--
Yorick