[rubygems/rubygems] --prefer-local should resolve to latest version if no gems are available locally

Filtering out remote specs should only apply where there are locally
installed specs. Otherwise they should always be considered.

https://github.com/rubygems/rubygems/commit/118f8389a1

lib/bundler/resolver.rb

@@ -389,9 +389,18 @@ module Bundler
     end
 
     def filter_remote_specs(specs, package)
-      return specs unless package.prefer_local?
+      if package.prefer_local?
+        local_specs = specs.select {|s| s.is_a?(StubSpecification) }
 
-      specs.select {|s| s.is_a?(StubSpecification) }
+        if local_specs.empty?
+          package.consider_remote_versions!
+          specs
+        else
+          local_specs
+        end
+      else
+        specs
+      end
     end
 
     # Ignore versions that depend on themselves incorrectly

spec/bundler/commands/install_spec.rb

@@ -1606,6 +1606,26 @@ RSpec.describe "bundle install with gem sources" do
       expect(out).to include("Fetching foo 1.0.1").and include("Installing foo 1.0.1").and include("Fetching b 1.0.0").and include("Installing b 1.0.0")
       expect(last_command).to be_success
     end
+
+    it "resolves to the latest version if no gems are available locally" do
+      build_repo4 do
+        build_gem "myreline", "0.3.8"
+        build_gem "debug", "0.2.1"
+
+        build_gem "debug", "1.10.0" do |s|
+          s.add_dependency "myreline"
+        end
+      end
+
+      install_gemfile <<~G, "prefer-local": true, verbose: true
+        source "https://gem.repo4"
+
+        gem "debug"
+      G
+
+      expect(out).to include("Fetching debug 1.10.0").and include("Installing debug 1.10.0").and include("Fetching myreline 0.3.8").and include("Installing myreline 0.3.8")
+      expect(last_command).to be_success
+    end
   end
 
   context "with a symlinked configured as bundle path and a gem with symlinks" do