Bad query plan for self-referencing CTE view query and variable in WHERE clause. Is there way out or this is SQL Server defect?

Question

Please help. Thank you for your time and expertise.
Prerequisites: sql query needs to be a view. Real view is more than recursion. It computes location path,  is used in JOINs and returns this path.
Problem: no matter what I tried, sql server does not produce 'index seek' when using variable but does with literal.
See full reproduction code below.
I expect that query SELECT lcCode FROM dbo.vwLocationCodes l WHERE l.lcID = @lcID will seek UNIQUE index but it does not.
I tried these:
1. Changing UX and/or PK to be CLUSTERED.
2. query OPTION(RECOMPILE)
3. FORCESEEK on view
4. SQL Server 2012/2014
5. Wrap it into function and CROSS APPLY. On large outer number of rows this just dies, no solution
but to no avail. This smells like a bug in SQL Server. I am seeking your confirmation.
I am thinking it is a bug as variable value is high-cardinality, 1, and query is against unique key. This must produce single seek, depending if clustered or nonclustred index is unique
Thanks
Vladimir
use tempdb
BEGIN TRAN
-- setup definition
CREATE TABLE dbo.LocationHierarchy(
lcID int NOT NULL ,
lcHID hierarchyid NOT NULL,
lcCode nvarchar(25) COLLATE SQL_Latin1_General_CP1_CI_AS NOT NULL,
lcHIDParent AS lcHID.GetAncestor(1) PERSISTED,
CONSTRAINT PK_LocationHierarchy_lcID PRIMARY KEY NONCLUSTERED (lcID ASC),
CONSTRAINT UX_LocationHierarchy_pltID_lcHID UNIQUE CLUSTERED (lcHID ASC)
-- add some data
INSERT INTO dbo.LocationHierarchy
VALUES
(1, '/', 'A')
,(2, '/1/', 'B')
,(3, '/1/1/', 'C')
,(4, '/1/1/1/', 'D')
--DROP VIEW dbo.vwLocationCodes
GO
CREATE VIEW dbo.vwLocationCodes
AS
WITH ru AS
SELECT
lh.lcID
,lh.lcCode
,lh.lcHID
,CAST('/' + lh.lcCode + '/' as varchar(8000)) as LocationPath
-- to support recursion
,lh.lcHIDParent
FROM dbo.LocationHierarchy lh
UNION ALL
SELECT
ru.lcID
,ru.lcCode
,ru.lcHID
,CAST('/' + lh.lcCode + ru.LocationPath as varchar(8000)) as LocationPath
,lh.lcHIDParent
FROM dbo.LocationHierarchy lh
JOIN ru ON ru.lcHIDParent = lh.lcHID
SELECT
lh.lcID
,lh.lcCode
,lh.LocationPath
,lh.lcHID
FROM ru lh
WHERE lh.lcHIDParent IS NULL
GO
-- get data via view
SELECT
CONCAT(SPACE(l.lcHID.GetLevel() * 4), lcCode) as LocationIndented
FROM dbo.vwLocationCodes l
ORDER BY lcHID
GO
SET SHOWPLAN_XML ON
GO
DECLARE @lcID int = 2
-- I believe this produces bad plan and is defect in SQL Server optimizer.
-- variable value cardinality is 1 and SQL Server should know that. Optiomal plan is to do index seek with key lookup.
-- This does not happen.
SELECT lcCode FROM dbo.vwLocationCodes l WHERE l.lcID = @lcID -- bad plan
-- this is a plan I expect.
SELECT lcCode FROM dbo.vwLocationCodes l WHERE l.lcID = 2 -- good plan
-- I reviewed these but I need a view here, can't be SP
-- http://sqlblogcasts.com/blogs/tonyrogerson/archive/2008/05/17/non-recursive-common-table-expressions-performance-sucks-1-cte-self-join-cte-sub-query-inline-expansion.aspx
-- http://social.msdn.microsoft.com/Forums/sqlserver/en-US/22d2d580-0ff8-4a9b-b0d0-e6a8345062df/issue-with-select-using-a-recursive-cte-and-parameterizing-the-query?forum=transactsql
GO
SET SHOWPLAN_XML OFF
GO
ROLLBACK
Vladimir Moldovanenko

Answer 1

Here is more... note that I am creating table Items and these can be in Locations.
I am trying LEFT JOIN and OUTER APLLY to 'bend' query into NESTED LOOP and SEEK. There has to be nested loop, 2 rows against 4. But SQL Server fails to generate optimal plan with SEEK. Even RECOMPILE does not help
use tempdb
BEGIN TRAN
-- setup definition
CREATE TABLE dbo.LocationHierarchy(
lcID int NOT NULL ,
lcHID hierarchyid NOT NULL,
lcCode nvarchar(25) COLLATE SQL_Latin1_General_CP1_CI_AS NOT NULL,
lcHIDParent AS lcHID.GetAncestor(1) PERSISTED,
CONSTRAINT PK_LocationHierarchy_lcID PRIMARY KEY NONCLUSTERED (lcID ASC),
CONSTRAINT UX_LocationHierarchy_pltID_lcHID UNIQUE CLUSTERED (lcHID ASC)
-- add some data
INSERT INTO dbo.LocationHierarchy
VALUES
(1, '/', 'A')
,(2, '/1/', 'B')
,(3, '/1/1/', 'C')
,(4, '/1/1/1/', 'D')
--DROP VIEW dbo.vwLocationCodes
GO
--DECLARE @Count int = 10;
--WITH L0 AS (SELECT N FROM (VALUES(1),(1),(1),(1),(1),(1),(1),(1),(1),(1)) N (N))-- 10 rows
--,L1 AS (SELECT n1.N FROM L0 n1 CROSS JOIN L0 n2) -- 100 rows
--,L2 AS (SELECT n1.N FROM L1 n1 CROSS JOIN L1 n2) -- 10,000 rows
--,L3 AS (SELECT n1.N FROM L2 n1 CROSS JOIN L2 n2) -- 100,000,000 rows
--,x AS
-- SELECT TOP (ISNULL(@Count, 0))
-- ROW_NUMBER() OVER (ORDER BY (SELECT NULL)) as Number
-- FROM L3 n1
--SELECT Number as itmID, NTILE(4)OVER(ORDER BY Number) as lcID
--INTO dbo.Items
--FROM x
----ORDER BY n1.N
--ALTER TABLE dbo.Items ALTER COLUMN itmID INT NOT NULL
--ALTER TABLE dbo.Items ADD CONSTRAINT PK PRIMARY KEY CLUSTERED (itmID)
CREATE TABLE dbo.Items (itmID int NOT NULL PRIMARY KEY, lcID int NOT NULL)
INSERT INTO dbo.items
VALUES(1, 1)
,(2, 3)
GO
CREATE VIEW dbo.vwLocationCodes
AS
WITH ru AS
SELECT
lh.lcID
,lh.lcCode
,lh.lcHID
,CAST('/' + lh.lcCode + '/' as varchar(8000)) as LocationPath
-- to support recursion
,lh.lcHIDParent
FROM dbo.LocationHierarchy lh
UNION ALL
SELECT
ru.lcID
,ru.lcCode
,ru.lcHID
,CAST('/' + lh.lcCode + ru.LocationPath as varchar(8000)) as LocationPath
,lh.lcHIDParent
FROM dbo.LocationHierarchy lh
JOIN ru ON ru.lcHIDParent = lh.lcHID
SELECT
lh.lcID
,lh.lcCode
,lh.LocationPath
,lh.lcHID
FROM ru lh
WHERE lh.lcHIDParent IS NULL
GO
-- get data via view
SELECT
CONCAT(SPACE(l.lcHID.GetLevel() * 4), lcCode) as LocationIndented
FROM dbo.vwLocationCodes l
ORDER BY lcHID
GO
--SET SHOWPLAN_XML ON
GO
DECLARE @lcID int = 2
-- I believe this produces bad plan and is defect in SQL Server optimizer.
-- variable value cardinality is 1 and SQL Server should know that. Optiomal plan is to do index seek with key lookup.
-- This does not happen.
SELECT lcCode FROM dbo.vwLocationCodes l WHERE l.lcID = @lcID-- OPTION(RECOMPILE) -- bad plan
-- this is a plan I expect.
SELECT lcCode FROM dbo.vwLocationCodes l WHERE l.lcID = 2 -- good plan
SELECT *
FROM dbo.Items itm
LEFT JOIN dbo.vwLocationCodes l ON l.lcID = itm.lcID
OPTION(RECOMPILE)
SELECT *
FROM dbo.Items itm
OUTER APPLY
SELECT *
FROM dbo.vwLocationCodes l
WHERE l.lcID = itm.lcID
) l
-- I reviewed these but I need a view here, can't be SP
-- http://sqlblogcasts.com/blogs/tonyrogerson/archive/2008/05/17/non-recursive-common-table-expressions-performance-sucks-1-cte-self-join-cte-sub-query-inline-expansion.aspx
-- http://social.msdn.microsoft.com/Forums/sqlserver/en-US/22d2d580-0ff8-4a9b-b0d0-e6a8345062df/issue-with-select-using-a-recursive-cte-and-parameterizing-the-query?forum=transactsql
GO
--SET SHOWPLAN_XML OFF
GO
ROLLBACK
Vladimir Moldovanenko