I can confirm, I also has this bug:
/etc/grub.d/10_linux_zfs: 404: .: Can't open /tmp/zfsmnt.stGSQC/etc/os-release

I mounted the root partition under /target when I hit into this problem.
I simply modified the 404 line to use /etc.

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https://bugs.launchpad.net/bugs/1899372

Title:
  update-grub 10_linux_zfs fails when /usr is a separate filesystem

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