[BUGFIX] fix issue around how undefined stored in _values chain

packages/@ember/-internals/meta/lib/meta.ts

@@ -792,7 +792,7 @@ export interface Meta {
   writeValues(subkey: string, value: any): void;
   peekValues(key: string): any;
   deleteFromValues(key: string): any;
-  readInheritedValue(key: string, subkey: string): any;
+  readInheritedValue(key: string): any;
   writeValue(obj: object, key: string, value: any): any;
 }
 
@@ -808,34 +808,20 @@ if (DEBUG) {
     );
 
     let map = this._getOrCreateOwnMap('_values');
-    map[subkey] = value;
+    map[subkey] = value === undefined ? UNDEFINED : value;
   };
 
-  Meta.prototype.peekValues = function(subkey: string) {
-    return this._findInherited2('_values', subkey);
+  Meta.prototype.peekValues = function(key: string) {
+    let val = this._findInherited2('_values', key);
+    return val === UNDEFINED ? undefined : val;
   };
 
-  Meta.prototype.deleteFromValues = function(subkey: string) {
-    delete this._getOrCreateOwnMap('_values')[subkey];
+  Meta.prototype.deleteFromValues = function(key: string) {
+    delete this._getOrCreateOwnMap('_values')[key];
   };
 
-  Meta.prototype.readInheritedValue = function(key, subkey) {
-    let internalKey = `_${key}`;
-
-    let pointer: Meta | null = this;
-
-    while (pointer !== null) {
-      let map = pointer[internalKey];
-      if (map !== undefined) {
-        let value = map[subkey];
-        if (value !== undefined || subkey in map) {
-          return value;
-        }
-      }
-      pointer = pointer.parent;
-    }
-
-    return UNDEFINED;
+  Meta.prototype.readInheritedValue = function(key: string) {
+    return this._findInherited2('_values', key);
   };
 
   Meta.prototype.writeValue = function(obj: object, key: string, value: any) {

packages/@ember/-internals/metal/lib/properties.ts

@@ -56,10 +56,12 @@ export function INHERITING_GETTER_FUNCTION(name: string): InheritingGetterFuncti
     let meta = peekMeta(this);
     let val;
     if (meta !== null) {
-      val = meta.readInheritedValue('values', name);
-      if (val === UNDEFINED) {
+      val = meta.readInheritedValue(name);
+      if (val === undefined) {
         let proto = Object.getPrototypeOf(this);
-        return proto === null ? undefined : proto[name];
+        val = proto === null ? undefined : proto[name];
+      } else {
+        val = val === UNDEFINED ? undefined : val;
       }
     }
 

packages/@ember/-internals/metal/lib/watch_key.ts

@@ -1,4 +1,4 @@
-import { Meta, meta as metaFor, peekMeta, UNDEFINED } from '@ember/-internals/meta';
+import { Meta, meta as metaFor, peekMeta } from '@ember/-internals/meta';
 import { lookupDescriptor } from '@ember/-internals/utils';
 import { EMBER_METAL_TRACKED_PROPERTIES } from '@ember/canary-features';
 import { DEBUG } from '@glimmer/env';
@@ -131,8 +131,8 @@ export function unwatchKey(obj: object, keyName: string, _meta?: Meta): void {
             maybeMandatoryDescriptor.get &&
             (maybeMandatoryDescriptor.get as InheritingGetterFunction).isInheritingGetter
           ) {
-            let possibleValue = meta.readInheritedValue('values', keyName);
-            if (possibleValue === UNDEFINED) {
+            let possibleValue = meta.readInheritedValue(keyName);
+            if (possibleValue === undefined) {
               delete obj[keyName];
               return;
             }

packages/@ember/-internals/runtime/tests/system/object/observer_test.js

@@ -24,6 +24,31 @@ moduleFor(
       assert.equal(get(obj, 'count'), 1, 'should invoke observer after change');
     }
 
+    async ['@test setting `undefined` value on observed property behaves correctly'](assert) {
+      let MyClass = EmberObject.extend({
+        mood: 'good',
+        foo: observer('mood', function() {}),
+      });
+
+      let obj = MyClass.create();
+      assert.equal(get(obj, 'mood'), 'good');
+
+      set(obj, 'mood', 'bad');
+      await runLoopSettled();
+
+      assert.equal(get(obj, 'mood'), 'bad');
+
+      set(obj, 'mood', undefined);
+      await runLoopSettled();
+
+      assert.equal(get(obj, 'mood'), undefined);
+
+      set(obj, 'mood', 'awesome');
+      await runLoopSettled();
+
+      assert.equal(get(obj, 'mood'), 'awesome');
+    }
+
     async ['@test observer on subclass'](assert) {
       let MyClass = EmberObject.extend({
         count: 0,