I think this might be a bug but I wanted to check here before I report it on github. I'm using Godot 4 beta.
I have a simple scene with a background 3d sprite which is clipping in front of my player character 3d sprite.
Here's what I'm talking about:

If I move the background sprite back (z axis) slightly, the clipping stops:

But you'll notice in both pics, the background sprite is well behind the player sprite. I mean not even close.