On-screen keyboard pops up with touchscreen even when physical keyboard present

This feels like more of a feature than a bug. It's not only useful for testing, but a good assumption that the OSK should appear after the user has started touching the screen. You might have a physical keyboard but if it's a yoga-style laptop folded 180 degrees then you definitely want to use the OSK instead of the physical keyboard.

Not sure what you mean "useful for testing", but if in a yoga-style laptop the keyboard is still recognized as attached when completely folded that's a different issue. I suggest to create a setting to enable/disable the osk when a physical keyboard is already attached.

Actually I agree with this being a bug now. Encountered the problem myself last night. The OSK pops up even when touching the "Show Applications" icon. That's a bit much indeed.

Didn't this get fixed in early 2018 already?

This bug was fixed in the package gnome-shell - 3.35.91-1ubuntu2

---------------
gnome-shell (3.35.91-1ubuntu2) focal; urgency=medium

  * control: Fix package for Yaru Breaks. It's called `yaru-theme-gnome-shell`
    and not `yaru-theme`
  * control: Bump Breaks on appindicator and desktop-icons.
    These have been updated for GNOME 3.36

gnome-shell (3.35.91-1ubuntu1) focal; urgency=medium

  * Merge with Debian. Remaining changes:
    + Replace gnome-backgrounds dep with ubuntu-wallpapers and Suggests
      gnome-themes-standard-data, gnome-backgrounds
    + Add some Recommends:
      - ubuntu-session (| gnome-session) to have the ubuntu session available
      - xserver-xorg-legacy
      - yaru-theme-gnome-shell for the default ubuntu theming
    + Update debian/gbp.conf with Ubuntu settings
    + gnome-shell-common.install: Install Ubuntu mode
    + gnome-shell-common.prerm: Remove deprecated ubuntu theme alternative
    + ubuntu/desktop_detect.patch:
      - add caching for desktop detection to avoid querying the current
        desktop env variable as iterate through the list each time. For the
        time of the Shell process, we can expect this env variable to stay
        stable.
    + ubuntu/smarter_alt_tab.patch:
      - quick alt-tab (without showing up the switcher) switch only between
        the last window of the last 2 applications to be focused instead of
        raising all windows of those apps.
    + ubuntu/lightdm-user-switching.patch:
      - Allow user switching when using LightDM.
    + ubuntu/lock_on_suspend.patch
      - Respect Ubuntu's lock-on-suspend setting.
    + ubuntu/background_login.patch
      - Change default background color as we modified the default GDM color
        for our ubuntu session.
    + ubuntu/gdm_alternatives.patch
      - Add support for GDM3 theme alternatives
    + optional-hot-corner.patch
      - enable patch proposed by upstream developer already in package (but
        not in series) to add a settings for optional hot corner activation.
    + main-show-an-error-message-on-gnome-shell-crash.patch,
      global-make-possible-to-set-debug-flags-dynamically.patch,
      main-increase-the-granularity-of-backtraces-in-SHELL_DEBU.patch,
      main-add-backtrace-crashes-all-and-backtrace-all.patch,
      sessionMode-add-support-for-debugFlags-parameter.patch:
      - Improve debug JS tracing for crash reports
    + st-scroll-view-Handle-the-case-where-scrollbars-are-NULL.patch:
      - Fix crash on theme changes
    + ubuntu/search-call-XUbuntuCancel-method-on-providers-when-no-dat.patch:
      - stop searches when requested from UI
    + magnifier-Show-cursor-when-magnifier-is-enabled-and-scale.patch:
      - Show monitor scaled cursor when magnifier is enabled
    + Break gnome-shell-extension-appindicator (<< 30)
    + Break gnome-shell-extension-desktop-icons (<< 19.01.3+git20190814)
    + Break gnome-shell-extension-ubuntu-dock (<< 67ubuntu20.04.1)
    + Break yaru-theme (<< 20.04.2)
  * debian/control:
    - Bump breaks on gnome-shell-extension-ubuntu-dock (<< 67ubuntu20.04.1)
    - Bump breaks on gnome-shell-extension-dashtodock (<< 67+git20200225-1)
    - Bump breaks on yaru-theme...