Nit.

Author: kschwab

pydantic_settings/sources.py

@@ -1563,6 +1563,16 @@ def _add_parser_args(
     ) -> ArgumentParser:
         subparsers: Any = None
         alias_path_args: dict[str, str] = {}
+        # Ignore model default if the default is a model and not a subclass of the current model.
+        model_default = (
+            None
+            if (
+                model_default is not PydanticUndefined
+                and (is_model_class(type(model_default)) or is_pydantic_dataclass(type(model_default)))
+                and not issubclass(type(model_default), model)
+            )
+            else model_default
+        )
         for field_name, field_info in self._sort_arg_fields(model):
             sub_models: list[type[BaseModel]] = self._get_sub_models(model, field_name, field_info)
             alias_names, is_alias_path_only = _get_alias_names(
@@ -1615,17 +1625,6 @@ def _add_parser_args(
                         model_default=PydanticUndefined,
                     )
             else:
-                # For union of models, ignore model default if not of same type as current model.
-                model_default = (
-                    None
-                    if (
-                        model_default is not PydanticUndefined
-                        and (is_model_class(type(model_default)) or is_pydantic_dataclass(type(model_default)))
-                        and not issubclass(type(model_default), model)
-                    )
-                    else model_default
-                )
-
                 flag_prefix: str = self._cli_flag_prefix
                 is_append_action = _annotation_contains_types(
                     field_info.annotation, (list, set, dict, Sequence, Mapping), is_strip_annotated=True