virtual_problem.cs

// See https://aka.ms/new-console-template for more information
Console.WriteLine("Hello, World!");

AzureCorePolicy azureCorePolicy = new AzureCorePolicy();
ClientModelPolicy clientModelPolicy = new ClientModelPolicy();

MockResponse response = new MockResponse();
azureCorePolicy.SetIsError(response);
clientModelPolicy.UseIsError(response);

public class PipelineResponse
{
    public bool IsError
    {
        get;
        protected set;
    }
}

public class Response : PipelineResponse
{
    // The key observation is that if you make the base type member virtual and remove this property
    // the problem goes away.
    public new virtual bool IsError
    {
        get => base.IsError;
        internal set => base.IsError = value;
    }
}

public class MockResponse : Response
{
    private bool? _isError;
    public override bool IsError { get => _isError ?? base.IsError; }
    public void SetIsError(bool value) => _isError = value;
}

public class AzureCorePolicy
{
    public void SetIsError(MockResponse response)
    {
        response.SetIsError(true);
        Console.WriteLine($"AzureCorePolicy, Response.IsError: {response.IsError}");
    }
}

public class ClientModelPolicy
{
    public void UseIsError(PipelineResponse response)
    {
        Console.WriteLine($"ClientModelPolicy, PipelineResponse.IsError: {response.IsError}");
    }
}