Migrate test infrastructure from xUnit v2 to xUnit v3

[MichaelSimons]

Overview

The repo currently uses xUnit v2 for its test infrastructure across ~50+ test projects. xUnit v3 has reached stable release and the arcade SDK already ships full support via XUnitV3.targets. We should migrate to take advantage of the improvements.

Note: There is a coupling between the templating and sdk repos in the templating test infrastructure which prevents the sdk from upgrading to xunit v3 - dotnet/sdk#52914

Why upgrade

Performance & execution model

• Tests compile to self-contained executables, eliminating the external runner process and the overhead of assembly loading/reflection at startup.
• Improved parallel execution with a new algorithm that better distributes work across threads.

Modern .NET alignment

• Built directly on top of Microsoft.Testing.Platform, the modern test platform that replaces VSTest internals.
• First-class support for ValueTask throughout the API (IAsyncLifetime, data attributes, etc.).
• Native support for generic test methods, required members, and other modern C# features.

Better diagnostics & developer experience

• Rich assertion failure messages with improved output formatting (printMaxStringLength, printMaxObjectDepth, etc.).
• Built-in support for explicit tests ([Fact(Explicit = true)]) — tests that only run when specifically requested.
• Assert.Equivalent for deep structural comparison without requiring ordering.
• Improved theory data with ITheoryDataRow, typed TheoryData<> up to 10 parameters, and MemberData that works with properties, methods, and fields.

Simplified extensibility

• Data attributes are self-describing — no more separate IDataDiscoverer classes needed alongside custom DataAttribute implementations.
• Streamlined fixture and lifecycle model.

Ecosystem

• xUnit v2 is in maintenance mode. New features, performance work, and bug fixes are v3-only.
• Arcade SDK already defines XUnitV3Version and provides XUnitV3.targets + XUnitV3.Runner.targets, so the build infrastructure is ready.

[Frulfump]

Will you use the xUnit.v3.mtp-v2 package?

[MichaelSimons]

Will you use the xUnit.v3.mtp-v2 package?

The immediate goal is to do a straight forward simple upgrade as is. After that we can start to make use of the new features like mtp.