fix(misconf): properly resolve local Terraform cache

pkg/iac/scanners/terraform/parser/load_module.go

@@ -90,9 +90,9 @@ func (e *evaluator) loadModuleFromTerraformCache(ctx context.Context, b *terrafo
 	var modulePath string
 	if e.moduleMetadata != nil {
 		// if we have module metadata we can parse all the modules as they'll be cached locally!
-		name := b.ModuleName()
+		moduleKey := b.ModuleKey()
 		for _, module := range e.moduleMetadata.Modules {
-			if module.Key == name {
+			if module.Key == moduleKey {
 				modulePath = path.Clean(path.Join(e.projectRootPath, module.Dir))
 				break
 			}

pkg/iac/scanners/terraform/parser/parser_test.go

@@ -2010,6 +2010,61 @@ variable "baz" {}
 	assert.Contains(t, buf.String(), "variables=\"foo\"")
 }
 
+func TestLoadChildModulesFromLocalCache(t *testing.T) {
+	var buf bytes.Buffer
+	slog.SetDefault(slog.New(log.NewHandler(&buf, &log.Options{Level: log.LevelDebug})))
+
+	fsys := fstest.MapFS{
+		"main.tf": &fstest.MapFile{Data: []byte(`module "level_1" {
+  source = "./modules/level_1"
+}`)},
+		"modules/level_1/main.tf": &fstest.MapFile{Data: []byte(`module "level_2" {
+  source  = "../level_2"
+}`)},
+		"modules/level_2/main.tf": &fstest.MapFile{Data: []byte(`module "level_3" {
+  count = 2
+  source  = "../level_3"
+}`)},
+		"modules/level_3/main.tf": &fstest.MapFile{Data: []byte(`resource "foo" "bar" {}`)},
+		".terraform/modules/modules.json": &fstest.MapFile{Data: []byte(`{
+    "Modules": [
+        { "Key": "", "Source": "", "Dir": "." },
+        {
+            "Key": "level_1",
+            "Source": "./modules/level_1",
+            "Dir": "modules/level_1"
+        },
+        {
+            "Key": "level_1.level_2",
+            "Source": "../level_2",
+            "Dir": "modules/level_2"
+        },
+        {
+            "Key": "level_1.level_2.level_3",
+            "Source": "../level_3",
+            "Dir": "modules/level_3"
+        }
+    ]
+}`)},
+	}
+
+	parser := New(
+		fsys, "",
+		OptionStopOnHCLError(true),
+	)
+	require.NoError(t, parser.ParseFS(context.TODO(), "."))
+
+	modules, _, err := parser.EvaluateAll(context.TODO())
+	require.NoError(t, err)
+
+	assert.Len(t, modules, 5)
+
+	assert.Contains(t, buf.String(), "Using module from Terraform cache .terraform/modules\tsource=\"./modules/level_1\"")
+	assert.Contains(t, buf.String(), "Using module from Terraform cache .terraform/modules\tsource=\"../level_2\"")
+	assert.Contains(t, buf.String(), "Using module from Terraform cache .terraform/modules\tsource=\"../level_3\"")
+	assert.Contains(t, buf.String(), "Using module from Terraform cache .terraform/modules\tsource=\"../level_3\"")
+}
+
 func TestLogParseErrors(t *testing.T) {
 	var buf bytes.Buffer
 	slog.SetDefault(slog.New(log.NewHandler(&buf, nil)))

pkg/iac/terraform/block.go

@@ -480,22 +480,12 @@ func (b *Block) FullName() string {
 	return b.LocalName()
 }
 
-func (b *Block) ModuleName() string {
-	name := strings.TrimPrefix(b.LocalName(), "module.")
-	if b.moduleBlock != nil {
-		module := strings.TrimPrefix(b.moduleBlock.FullName(), "module.")
-		name = fmt.Sprintf(
-			"%s.%s",
-			module,
-			name,
-		)
-	}
-	var parts []string
-	for _, part := range strings.Split(name, ".") {
-		part = strings.Split(part, "[")[0]
-		parts = append(parts, part)
+func (b *Block) ModuleKey() string {
+	name := b.Reference().NameLabel()
+	if b.moduleBlock == nil {
+		return name
 	}
-	return strings.Join(parts, ".")
+	return fmt.Sprintf("%s.%s", b.moduleBlock.ModuleKey(), name)
 }
 
 func (b *Block) UniqueName() string {