citar-insert-bibtex creates a new buffer, calls bibtex-set-dialect with no arguments, then inserts all bibliographies and looks for the key. When bibtex-set-dialect gets called without arguments, it sets the dialect to the current value of bibtex-dialect. bibtex-dialect can either be customized globally, or be set as a local variable. A local variable is useless for the citar-insert-bibtex use case, because the newly created buffer won’t inherit it. So the dialect will always be set to the global value. This defaults to bibtex when we want biblatex.

Having to set this value globally feels super weird. Surely this should be a per-file property. Can we not mix different bibliography formats? Do we have to modify the global value every time we switch between different bibliographies?