What does "Entity API >= 8.x-1.0-alpha3 module is now a dependency and needs to be installed before running updates" during drush updatedb mean?

I am doing a Drupal 8.6.18 to 8.9.19 update via composer.

After upgrading the packages via composer, I updated the database, which shows a warning:

$ vendor/bin/drush updatedb
<a href="https://www.drupal.org/project/entity">Entity API >= 8.x-1.0-alpha3</a>
 module is now a dependency and needs to be installed before running updates.
 (Currently using Media entity Entity API missing)                   
 [error]
Requirements check reports errors. Do you wish to continue? (y/n): 

Continuing works, but I am a little scared.

What is the background of this message?

drupal/entity is already at version 1.3.0:

$ composer show drupal/entity
[...]
versions : * 1.3.0

What is interesting, is that pm:info does not show a version information for the entity module. Is this maybe the reason?

$ vendor/bin/drush pm:info entity
 Extension        :  entity                                                                                                                                                                                                             
 Project          :  Unknown                                                                                                                                                                                                            
 Type             :  module                                                                                                                                                                                                             
 Title            :  Entity                                                                                                                                                                                                             
 Description      :  Provides expanded entity APIs, which will be moved to Drupal core one day.                                                                                                                                         
 Package          :  Other                                                                                                                                                                                                              
 PHP              :  7.0.8                                                                                                                                                                                                              
 Status           :  enabled                                                                                                                                                                                                            
 Path             :  modules/contrib/entity                                                                                                                                                                                             
 Schema version   :  8000                                                                                                                                                                                                               
 Requires         :  none                                                                                                                                                                                                               
 Required by      :  media_entity, media_entity_document, media_entity_embeddable_video, media_entity_image, video_embed_media, foodservice_core, foodservice_globalelement, foodservice_product, foodservice_recipe, foodservice_video 
 Permissions      :  none                                                                                                                                                                                                               
 Configure        :  None                                                            

I have already read https://www.drupal.org/project/media_entity/issues/2722073, which comes to the conclusion that the entity module needs to be enabled. But it is in my case.

I think I found the reason. I was having docroot/modules/contrib/entity checked out from https://git.drupalcode.org/project/entity.git via composer. The git version does not seem to have a version field and then causes problems.

The underlying reason is, that before the update I was having this requirement:

"drupal/entity": "1.x-dev",

This instructs composer to clone the dev repo.

When updating I changed this to

"drupal/entity": "^1.2",

No composer could theoretically download the release-ZIP, but because the folder is already there it seems to just checkout the new version.

Deleting that folder docroot/modules/contrib/entity and composer install + cache rebuild solved the problem.