RSRP-287596: "Code is heuristically unreachable" doesn't consider variables passed by reference

The following example demonstrates a false positive for the "Code is heuristically unreachable" code issue.
Set a breakpoint on the highlighted line and it will be hit if anything other than a string is passed to the Convert method.

object Convert(object obj)
{
    var str = obj as string;
    if (str != null)
    {
        return str;
    }
    if (TryConvert(ref obj))
    {
        str = obj as string;
        if (str != null)
        {
            return str; // FALSE POSITIVE: "Code is heuristically unreachable"
        }
    }
    return null;
}
bool TryConvert(ref object obj)
{
    obj = "NOT NULL";
    return true;
}