Unexpected difference between lualatex and pdflatex with babel and quotes

Consider this tex:

documentclass[british]{article}
usepackage[main=british]{babel}
begin{document}

Aldred, Rachel. 2010. {`{``On the Outside''}: Constructing Cycling
Citizenship.'} emph{Social & Cultural Geography} 11 (1): 35--52.

end{document}

Compiling with pdflatex, we get

‘“On the Outside”: Constructing Cycling Citizenship.’

But with lualatex, we get

“‘On the Outside”: Constructing Cycling Citizenship.’

The difference here is the treatment of `{`` at the start. pdflatex reads it as singlequote doublequote, while lualatex reads it as doublequote singlequote.

What explains this difference? Is it expected? Is it a bug in lualatex, or undefined behavior?

(Originally reported at https://github.com/jgm/pandoc/issues/6958)