[System.Diagnostics.DiagnosticSource.Activity] Reset recorded flag when creating activity when not requested by sampler(s) (#111289)

* Reset recorded flag when creating activity when not requested by samplers.

* Additional test coverage.

* Test fixes.

* Code review.

Author: CodeBlanch

src/libraries/System.Diagnostics.DiagnosticSource/src/System/Diagnostics/Activity.cs

@@ -1233,7 +1233,9 @@ internal static Activity Create(ActivitySource source, string name, ActivityKind
                     activity._parentSpanId = parentContext.SpanId.ToString();
                 }
 
-                activity.ActivityTraceFlags = parentContext.TraceFlags;
+                // Note: Don't inherit Recorded from parent as it is set below
+                // based on sampling decision
+                activity.ActivityTraceFlags = parentContext.TraceFlags & ~ActivityTraceFlags.Recorded;
                 activity._parentTraceFlags = (byte)parentContext.TraceFlags;
                 activity.HasRemoteParent = parentContext.IsRemote;
             }

src/libraries/System.Diagnostics.DiagnosticSource/tests/ActivitySourceTests.cs

@@ -256,7 +256,7 @@ public void TestListeningToConstructedActivityEvents()
         }
 
         [ConditionalFact(typeof(RemoteExecutor), nameof(RemoteExecutor.IsSupported))]
-        public void EnsureRecordingTest()
+        public void AllDataAndRecordedSamplingTest()
         {
             RemoteExecutor.Invoke(() => {
                 Activity.ForceDefaultIdFormat = true;
@@ -278,14 +278,76 @@ public void EnsureRecordingTest()
 
                 ActivitySource.AddActivityListener(listener);
 
-                Activity a = aSource.StartActivity("RecordedActivity");
+                // Note: Remote parent is set as NOT recorded
+                var parentContext = new ActivityContext(ActivityTraceId.CreateRandom(), ActivitySpanId.CreateRandom(), ActivityTraceFlags.None, isRemote: true);
+
+                Activity a = aSource.StartActivity("RecordedActivity", ActivityKind.Internal, parentContext);
                 Assert.NotNull(a);
 
+                Assert.True(a.IsAllDataRequested);
                 Assert.True(a.Recorded);
                 Assert.True((a.Context.TraceFlags & ActivityTraceFlags.Recorded) != 0);
             }).Dispose();
         }
 
+        [ConditionalFact(typeof(RemoteExecutor), nameof(RemoteExecutor.IsSupported))]
+        public void AllDataSamplingTest()
+        {
+            RemoteExecutor.Invoke(() => {
+                Activity.ForceDefaultIdFormat = true;
+                Activity.DefaultIdFormat = ActivityIdFormat.W3C;
+
+                ActivitySource aSource = new ActivitySource("EnsureRecordingTest");
+
+                ActivityListener listener = new ActivityListener
+                {
+                    ShouldListenTo = (activitySource) => true,
+                    Sample = (ref ActivityCreationOptions<ActivityContext> activityOptions) => ActivitySamplingResult.AllData
+                };
+
+                ActivitySource.AddActivityListener(listener);
+
+                // Note: Remote parent is set as recorded
+                var parentContext = new ActivityContext(ActivityTraceId.CreateRandom(), ActivitySpanId.CreateRandom(), ActivityTraceFlags.Recorded, isRemote: true);
+
+                Activity a = aSource.StartActivity("RecordedActivity", ActivityKind.Internal, parentContext);
+                Assert.NotNull(a);
+
+                Assert.True(a.IsAllDataRequested);
+                Assert.False(a.Recorded);
+                Assert.False((a.Context.TraceFlags & ActivityTraceFlags.Recorded) != 0);
+            }).Dispose();
+        }
+
+        [ConditionalFact(typeof(RemoteExecutor), nameof(RemoteExecutor.IsSupported))]
+        public void PropagationDataSamplingTest()
+        {
+            RemoteExecutor.Invoke(() => {
+                Activity.ForceDefaultIdFormat = true;
+                Activity.DefaultIdFormat = ActivityIdFormat.W3C;
+
+                ActivitySource aSource = new ActivitySource("EnsureRecordingTest");
+
+                ActivityListener listener = new ActivityListener
+                {
+                    ShouldListenTo = (activitySource) => true,
+                    Sample = (ref ActivityCreationOptions<ActivityContext> activityOptions) => ActivitySamplingResult.PropagationData
+                };
+
+                ActivitySource.AddActivityListener(listener);
+
+                // Note: Remote parent is set as recorded
+                var parentContext = new ActivityContext(ActivityTraceId.CreateRandom(), ActivitySpanId.CreateRandom(), ActivityTraceFlags.Recorded, isRemote: true);
+
+                Activity a = aSource.StartActivity("RecordedActivity", ActivityKind.Internal, parentContext);
+                Assert.NotNull(a);
+
+                Assert.False(a.IsAllDataRequested);
+                Assert.False(a.Recorded);
+                Assert.False((a.Context.TraceFlags & ActivityTraceFlags.Recorded) != 0);
+            }).Dispose();
+        }
+
         [ConditionalFact(typeof(RemoteExecutor), nameof(RemoteExecutor.IsSupported))]
         public void TestExpectedListenersReturnValues()
         {
@@ -424,7 +486,10 @@ public void TestActivityCreationProperties()
 
                     Assert.Equal(ctx.TraceId, activity.TraceId);
                     Assert.Equal(ctx.SpanId, activity.ParentSpanId);
-                    Assert.Equal(ctx.TraceFlags, activity.ActivityTraceFlags);
+                    Assert.NotEqual(ctx.TraceFlags, activity.ActivityTraceFlags);
+                    Assert.True(ctx.TraceFlags.HasFlag(ActivityTraceFlags.Recorded));
+                    Assert.False(activity.ActivityTraceFlags.HasFlag(ActivityTraceFlags.Recorded));
+                    Assert.False(activity.Recorded);
                     Assert.Equal(ctx.TraceState, activity.TraceStateString);
                     Assert.Equal(ActivityIdFormat.W3C, activity.IdFormat);